Professional indemnity insurance helps doctors reduce financial liability for medical negligence and other practice-related disputes. However, having such a policy does not guarantee that every claim made against them or expenses incurred during the litigation process will be settled. Like other policies, these insurance policies include exclusions that state when the insurer will reject a claim.
For example, criminal conduct, malicious actions, and incidents that happened outside the policy period are common exclusions in this kind of policy. Knowing them is as important as choosing the sum insured because it helps doctors avoid being surprised when they need financial help. In this informative guide, we will discuss common exclusions in professional indemnity insurance for doctors.
What is not covered under professional indemnity insurance for doctors?
Generally, professional indemnity insurance covers claims arising from professional negligence, in accordance with the policy’s terms and conditions. Still, the list of exclusions depends on the provider. Below are some examples of situations doctors should consider when choosing an insurance policy.
1. Criminal Activity and Fraud
Professional indemnity insurance for doctors does not cover the penalties associated with criminal activity and fraud. If a doctor commits fraud and falsifies medical records, the policy will not cover the penalties incurred. Legal expenses related to defending oneself from such allegations may or may not be included.
2. Deliberate Act
As the name suggests, the policy provides protection against professional liability claims. Therefore, the insurance company cannot cover any claim that stems from an intentional act of wrongdoing. At the same time, any undesirable treatment results do not necessarily indicate intentional misconduct.
3. Services Outside Your Professional Scope
Doctors must practice within the bounds of their education, training, and speciality. If a doctor performs a procedure outside his/her declared speciality, or if the policy does not include certain services, any claims arising from that procedure may fall outside the policy’s coverage. It is always important to know what services your policy covers, especially when your duties change.
4. Previous Incidents and Known Claims
There may be some cases where an incident prior to the retroactive period of the insurance policy will not be covered by the policy. Some policies also exclude claims for cases or complaints made before you purchase the policy. Always disclose any existing situations and confirm the insurer’s position on these issues.
5. Contractual Liability
Some doctors have contracts with certain hospitals or clinics that give them greater financial liability than usual. The insurance policy may exclude liabilities arising from the doctor’s contractual agreement that go beyond ordinary legal liability.
6. Fines and Discipline Penalties
Regulatory enquiries or disciplinary action may follow any patient complaint. Defence expenses related to any such proceedings depend upon the policy. Insurance companies will not pay fines and disciplinary penalties imposed for any criminal offense. Determine whether your insurance covers these issues if they occur and the extent of the coverage.
7. Claims outside the Period of the Policy
Some of the professional indemnity insurance policies run on a claims-made basis, which means that the making and reporting of a claim determine the coverage. A claim reported after the policy expires may not be covered. Therefore, doctors need to ensure they renew their policies in time.
8. Claims above the sum insured
If you have a covered claim, the insurer’s payment will depend on the insurance limit. For example, if the covered claim is ₹80 lakhs but the available limit is only ₹50 lakhs, the doctor must pay the remaining amount.
Why is it important to understand policy exclusions?
Understanding exclusions helps physicians make better decisions and prevents confusion when filing a claim.
1. Avoid unexpected expenses:
If there is a legal problem, then some expenses may be uncovered if one did not read the exclusions earlier.
2. Compare policies properly:
Although they have the same sum insured, the policies differ in other respects, such as exclusion clauses, defence of the policyholder, and reporting clauses.
3. Maintain continuous protection:
A break in coverage might affect your coverage when you switch insurers. Review the retroactive dates and continuity clauses in case of policy change or expiration.
4. Be prepared to handle complaints:
If your patient makes a claim that may result in a case, inform your insurance provider immediately, in accordance with your policy. Do not settle the case or accept any liability for the insurer without first reviewing the terms.
5. Practice responsibly:
Insurance only covers – it does not exonerate you from your duty as a professional. Ensuring your records are correct, obtaining a patient’s consent, informing them about their condition and treatment options, and explaining the procedure clearly are steps that, if followed consistently, can avoid most unwarranted professional disputes.
Conclusion
Professional indemnity insurance may serve as an economic rescue when doctors face covered professional negligence claims. However, acts of delinquency, deliberate misconduct, some prior events, and claims outside the insurance agreement’s scope are unlikely to be covered. Therefore, medical practitioners should read their policies thoroughly every time, as this is the only way to be sure their specific problem falls within the relevant policy’s coverage. Review the exclusions, sum assured, reporting period, and defense cover before purchasing your insurance policy. In case you are in doubt, contact the insurance company or an insurance expert.
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FAQs
1. Does professional indemnity insurance cover criminal acts?
No. Insurance usually excludes acts of criminality, fraud, and other illegal activity. Defense expenses against criminal accusations depend on the insurance policy.
2. Does professional indemnity insurance cover intentional mistakes?
Wilful misconduct is generally not covered. An unintentional error may be covered if it meets the policy’s definition of professional negligence.
3. Are all medical negligence claims covered?
No. Claims must meet the insurance coverage criteria. Exclusions, reporting requirements, retroactive dates, and coverage limitations can affect whether malpractice claims are accepted.
4. Does professional indemnity insurance cover claims from previous incidents?
It depends on the retroactive date, prior known circumstances, and reporting requirements, among others. Doctors need to be aware of such circumstances.
