Professional indemnity insurance policies, also known as professional liability insurance schemes, are insurance policies that financially protect the insured from professional risks and related legal expenses.
Indemnity insurance policies include situations where a 3rd party individual sustains any loss of property or physical harm because of professional service or advice offered by the insured individual.
The need for professional indemnity insurance policies in India – A brief overlook
As an example of why indemnity insurance policies are necessary in India, let’s take a look at data on consumer court cases filed against doctors and their outcomes in recent years.
- 400% – Increase in the total number of medical negligence cases filed in consumer court (2016’s report presented by National Law University, Bengaluru.)
- Only 10% to 15% cases – Proved to be genuine situations, where doctors were accused of neglecting their patients.
- 30% – Of all the cases were initiated because the final result (health recovery) did not meet the patient party’s expectation.
- 20% cases – Were filed because the individuals seeking medical attention did not have a complete understanding of the technical details of the situation.
Unfortunately, in all cases, the professional was left to defend himself or herself in the court of law, which took significant time and in most cases, loss of income for an extended period.
In an attempt to alleviate the financial burden of such conditions, several financial institutions have brought professional indemnity insurance policies for doctors.
Indemnity insurance policies
Indemnity insurance policies offer financial protection in case a patient suffers any injury or death during treatment. These expenses usually include all the legal costs, including the cost of appointing a lawyer and the cost of investigation.
Studies show that approximately 98,000 cases of medical negligence are reported across India every year. The legal fees and charges can accumulate to a staggering amount, draining an individual’s savings. They are exposed to several risks that might incur if not have a professional indemnity insurance policy.
Benefits of indemnity insurance policies
Medical professionals can enjoy several benefits by availing an indemnity insurance policy for unforeseen incidents at their workplace. One of the most important aspects is confidentiality. Insurance companies handle the information as confidential data of their clients, which ensures zero misrepresentation of the actual phenomenon.
Moreover, the extensive coverage also prove significantly beneficial which is one of the primary reasons why doctors should care about indemnity insurance policies. Let’s take a look.
- Coverage – Professional indemnity insurance policies offer financial protection against the following situations –
- Protection against financial damage (except in cases of wilful negligence).
- Policies extended to qualified employees and partners in the same practice.
- Any fraud and dishonesty caused by an employee are also covered under such insurance policies.
It is also helpful for professionals who have availed a loan for doctors or similar lines of credits, as an indemnity insurance policy will offer additional modes of financing for unforeseen situations.
Another benefit of such policies is that most non-banking financial companies offer both such forms of credits and insurance schemes to eligible applicants. For example, Bajaj Finserv offers credits tailor-made to fulfil the requirements of healthcare professionals. They also provide pre-approved offers that simplify the process of applying for credit and helps save time. Such offers are available on both secured and unsecured credits, including Loan for Doctors, Personal Loans, Home Loans, etc. You can check your pre-approved offer by sharing only some essential information online.
- Large disbursal amount – Professional indemnity insurance policies cover the insured individual against a large sum. Certain financial institutions offer coverage of up to Rs. 2 Crore, which can cover most of the expenses incurred during such a situation.
- Existing infrastructure – Most financial institutions introduce dedicated claims team to cope with the urgency of situations where a professional might be sued. Essential aspects like coverage assessment and legal steps are followed by these teams to ensure a fast settlement for the insured individual. With the advent and introduction of automated tools like practice management software, centrally connected diagnostics systems, patient-clinic portal, etc. retrieving such information has become significantly easier.
Indemnity insurance policies have become an integral part of professionals looking for preventive measures for any unwanted financial loss. With its easy availability, borrower-friendly terms, and affordable premiums, it has achieved significant popularity amongst professionals of different disciplines.