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Insurance Cover for White Coats

Continuing with our series  on Financial Well Being for Doctors, Mr Kapil Mehta, Executive Director, SecureNow Insurance Brokers Pvt Ltd gives insight on how to buy a professional indemnity cover.

Buying professional indemnity insurance is a must for doctors. Most medical establishments have made it mandatory for doctors to buy their own insurance. Even if it were not mandatory  we at SecureNow, strongly recommend buying this insurance to protect yourself against litigation. The number of litigations where dissatisfied patients sue a doctor are steadily increasing. This is because we are all generally becoming more aware of our rights but also because, in many cases, patients are ignorant about the real risks of medical care. When things go wrong they are not able to distinguish between the intrinsic risk of treatment and negligence.

There is no difference between the insurance needed for women or men doctors so this perspective is common to both.

What does Professional Indemnity Insurance Cover? It covers the cost of litigation if a patient sues you and pays damages if required. It covers doctor negligence or complaints related to sub-standard care.

Is this Cover for You?You can buy individual policy or for the medical establishment you run. If you are working in a corporate hospital then the corporate hospital will buy its own insurance for situations where the hospital is sued by a patient. However the doctor should also buy their own individual liability insurance. If they are individually named in a legal suit then their personal insurance will pay and not the hospital insurance.

How Much Cover Should You Buy?The first aspect for a doctor to decide is the sum assured. It depends upon the risk of litigation and the extent of damage that can be caused.

Specialists such as cosmetic surgery and anaesthetists are considered the most risky;

Surgical specialties such as cardiac, neuro, orthopaedics and ophthalmology moderately risky; and

Non-surgical specialities such as general medicine are the safest from a litigation perspective.

In most cities a high risk surgeon should have atleastRs 50 lakhs to 1 crore of insurance. Other specialties can do with Rs 10 to 50 lakhs. The amount of sum assured also depends upon the doctor’s clientele. High income patients are more likely to sue for larger amounts.

How many Incidents can you Cover?The second decision to be taken is the Any one Accident to the Any One Incident ration. This is colloquially called AoA:AoY ratio. A 1:1 ratio implies that the doctor can claim the full sum assured for any one incident. A 1:2 ratio implies that the doctor can claim only half the sum assured in any one incident. I recommend a 1:1 ratio for all professional indemnity.

The Time Frame Matters:The retroactive date is an important consideration. Claims are payable only for incidents that take place after the retroactive date. So if your insurance has a three year old retroactive date but someone files a suit for a procedure done four years ago that will not be paid. The retroactive is the date your first insurance was bought provided there is no break in renewals each year. Do make sure the correct retroactive date is stated in your insurance and that you always have a valid insurance.However, if you have a retroactive date of three years ago and someone files a suit for a surgery done last year the legal costs and damages will be paid by insurance.

Whom to Buy This Cover From?These insurances are offered by several insurers. Both public and private sector offer good products. Public sector insurers tend to be more cost effective. However, make sure you declare all the required information in detail and keep a copy of your proposal form. The private sector insurers have a more detailed underwriting process which is useful if you have a large practice with many doctors, staff and medical equipment.

The best way to buy such an insurance is through an insurance broker who is knowledgeable and can offer you a choice of insurers.

Will a broker charge me commission and service my claims?: The broker will not charge you any commission. This is paid for by the insurance company. The typical commission of such products is 17.5 per cent of premium. However, the premium rates you are charged are unlikely to differ whether or not you use a broker. The broker will also service and help you through the claim process if that is required. Another benefit of a broker is that they will remind you of renewals so you do not maintain the retroactive date.

The Tentative Premium you Pay :The price for Rs 25 lakhs sum assured for a cosmetic surgeon is about Rs 12,000 plus taxes per year for a typical private  sector insurer and Rss 9000 for select public sector insurers; Similarly for other surgeons it is about Rs 10,000 in the private sector and Rs 6000 in the public sector and for consulting physicians about Rs 7000 in private sector and Rupees 4000 in public.



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