Indemnity Insurance of Doctors and Hospitals Against Cases of Negligence in India

The first category of negligence is primarily attributable to the treating staff (doctors, nurses) though often the hospital too is made a co-respondent.

The second categories of incidents are however, totally due to the negligence of the hospital management who are held accountable.

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A case of human death or severe disability due to negligence may involve a compensation amounting to lakhs of rupees, depending on the type of case and the circumstances.

Recently, the Supreme Court of India awarded compensation as high as ten million rupees to a patient who suffered paralysis due to negligence of the doctors.

Although, the hospitals are places meant for treatment of sick and vulnerable patients and there should be no scope of negligence of any kind in their care and treatment, the nature of operations, the involvement of multiple levels and categories of staff and the interplay of multiple factors is such that it is virtually impossible to eliminate the possibility of any mishap happening in any hospital.

While every hospital must strive to minimize the incidence of negligence, it is prudent for every hospital to fully indemnify itself against all liability arising out of such cases which cannot be totally eliminated.

Depending upon the business level and the estimated annual risk, the policy should be of an amount appropriate enough to cover all liability and the policy must be renewed in time every year to ensure continuity.

2. Professional Indemnity Insurance for Doctors:

Professional indemnity policy for doctors provides indemnity to doctors against their liability for the errors and omissions committed while rendering professional service to their patients.

These are the situations where the course of events takes an unexpected turn resulting into harm to the patient who goes to the court with a suit for compensation.

Sometimes, the doctor may not be at fault at all. It may be just the patient’s misperception that the doctor has been negligent.

However, if the doctor looses the case it may mean hefty financial penalties to the doctor and even worse, loss of reputation for the life time.

The number of such medicolegal cases has been on the increase in the recent years. The trend started in USA where the “ambulance chasers” continue merrily with their bounty hunt and the courts continue awarding absurdly mind boggling penalties for issues that are relatively far less important, adding to the greed of the litigants and encouraging litigation.

Medicolegal litigation in India has not reached that level yet but it is catching up fast. Because of the diminishing faith in the doctors and increasing scrutiny of the case records, the chances of a doctor being dragged to the court, are much higher today than a decade ago.

The patients, because of increasing level of awareness, consumer activism and the right to information, are becoming less tolerant towards professional misconduct or negligence of any kind by the doctors.

It is, therefore, in the best interests of the doctors as well as the hospitals that every doctor protects himself/herself with a professional indemnity cover appropriate for his/ her professional level (which may go up to millions of rupees).

In fact, a good hospital administrator would ensure that all the consultants on the hospital’s panel get themselves adequately covered. As a normal practice, HR department is expected to have a copy of the policy in r/o every consultant in his/her personal file and is expected to remind the consultants about renewal of the policy at the right time.

A large number of insurance companies have professional indemnity policies for doctors.

For example, the New India Assurance Company offers the Professional Indemnity Policy that covers liability falling on medical professionals as a result of errors and omissions committed whilst rendering professional service.

The policy offers a benefit of retroactive period on continuous renewal, whereby claims reported in subsequent renewal but pertaining to earlier period after first inception of the policy, also become payable.

Group policies can also be issued covering members of a hospital or medical institution or department. A group discount in premium is also available, which depends on the number of members covered. United India Insurance Company also has a professional indemnity policy on similar lines.