Friends or Foe ?
HOPE CLINICS
Indemnity Insurance
MLAG
has been accused by Apex
Insurance Consultants Limited of
misguiding doctors to benefit itself. I wish to clarify that unlike Apex, MLAG is a
non profit organization which is
why we do not send salesmen to individual doctors to sell indemnity insurance. Our main purpose is to engage with the
Government on issues which adversely effect medical profession using RTI,
making representations, filing Writ Petitions and PILs and spreading knowledge
on legal matters among doctors across India. Any help we give individual
doctors is pro bono (without any charge). Indemnity insurance is a service
being provided by MLAG to benefit its members
and its actual value will be realized only once we cross the threshold number of
10,000 insured.
It is however an extremely difficult
question to answer whether Indemnity Insurers are your friends or
enemies. You cannot do without them, that is a given fact. However can
you blindly trust them ? Will they stand by you come what may
? Only those who have had the misfortune of needing them
will realize what I am saying. Care and caution are the key words when
dealing with them.
Insurance companies deny liability with
the most flimsy excuses and this distresses doctors who are already
troubled by the case of alleged medical negligence filed against them. Problem
however arises because Doctors treat their Indemnity Insurers like Medical
Representatives and do not spend time understanding and filling proposal forms
properly. Common mistakes made by doctors while taking indemnity
insurance are;
1)Taking only Professional (Personal) Indemnity
Insurance and no Error and Omission Policy for the Clinical Establishment they
work in. This is specially true in clinics and small nursing homes
which are proprietorship concerns. This leave them vulnerable to exploitation in case a patient
slips and falls or in case a visiting consultant is involved. In
these cases , the claim is made against the Hospital / clinic and not
the Doctor personally and the insurers gleefully deny liability in court.
2) Another problem arises because doctors without
realizing the concept of AOA; AOY take a cheaper policy which gives
them coverage for any 4 accidents in any one year. Though the policy is for 50
lacs and compensation awarded is also 50 lacs, the insurance company will only
pay 12.5 lacs for the one case decided against the doctor concerned since the
policy is 1;4 AOA;AOY. Doctors should only take policy in ratio 1;1 even
if the particular product is more costly.
3)Taking a small policy of 3 lacs by a surgeon or
a gynaecologist today is equivalent to not taking a policy. No interventionist should
be insured for less than one crore. This should ideally be split into 2 policies
of 30 lacs and 70 lacs with the same company, because those sitting on the
bench become generous when they come across an insurance policy of crores
and faced with a “victim” who has suffered a loss irrespective of the fact that
the insured doctor has been negligent or not.
4)Not informing the insurers of an incident which
may result in a claim later. An incident where sudden death occurs in OT and
violence occurs, resulting in an FIR being lodged or a legal notice from a
lawyer may be received , all need to be reported to the indemnity insurers even
though when you contact them you will be told telephonically that role of
Insurance Company will come into play only once the case reaches consumer court . Send
information regarding the incident with supporting documents and copy
of your insurance to the Company for their information and needful.
5)Not taking cover for unqualified attendants
working in your clinical establishment. 7.5 percent loading does not work out
to be more than a few hundred rupees only and trying to save this at the time
of taking policy costs exponentially more later once a case is filed in court.
Errors. Made by supporting staff does not absolve doctors of their liability
under the concept of vicarious liability,
6)Another problem is that doctors in Government
Hospitals and Institutions feel that the problem does not concern them and so
they do not take indemnity insurance. This may have been true 30 years ago but
today it is crystal clear that doctors working in Government
Hospitals, Tertiary Institutes, ESI Hospitals, Primary Health Centers, civil
hospitals and even Army Hospitals require Indemnity
Insurance. Basically any Doctor working in a hospital which charges
money for few services from some patients and provides free services
to others is covered within the purview of Consumer Protection Act
and being in Practice without Indemnity Insurance is “Negligence per
se”. A lapsed policy can be revived but only with care and caution
involving your agents / Association.
7) Not getting Retroactive date entered in the policy document causes problems when the policy is ported from one vendor to another and a problem occurs. The indemnity insurance in Inda is “Claim” made based policies and not “event” based policies. This means that an insurer has the leeway to deny liability if the claim is made 1 year later but event had occurred within the policy period insured by them. Even Insurers themselves poorly understand this concept as also their agents. Apex insurers recently accused MLAG of scare mongering and claimed there is nothing like claim made based policy vs an event based policy. Someday I plan to invite their legal team to our MLAG Annual Conference for a debate on the subject. It is however very hilariously illuminating that the very existence of a basic concept like this needs debate to convince someone like Apex Insurance who provides Indemnity Insurance to 60,000 plus doctors. I will answer this question with evidence in all my talks henceforth in all conferences I am invited to speak at.
8)Not filling proposal form properly. Ramkinker
Hospital and Ramkinker Research Institute are different entities for Insurance
purposes. However Doctors tend to sign the proposal form, negotiate the premium
and leave the actual filling of proposal form to the agents who represent
insurance companies. They fill up whatever they see on Boards and displays outside and this may actually defeat the whole purpose of
insurance in case an actual claim arises.
9)Ideally it is better that policy is taken as a
group so that the group has negotiating power with the insurers. It is however
necessary that those leading the group should be well aware of the
nitty gritty and falacies of insurance so they can get the best deal
for their members. Simple issue like interim payment of 50 percent as is being
demanded by consumer courts before accepting appeal under CPA 2019 are
routinely refused by insurance companies claiming that they will settle only
after final award is made by consumer courts. Problems like this as
also regarding appointment of lawyers are all easy to take care of
if a association or organization of doctors like MLAG / AMC / IMA /
FOGSI are made intermediaries. Similarly interest awarded by courts is
denied if the indemnity cover is exhausted. Interest is awarded by courts for
the reason that compensation was due to the complainant at the time he filed
complaint and not 10 years later when decision is given by courts. It is
assumed that the doctors have had advantage of raking in the interest on the
compensation amount all these years and hence should pay compensation.
Unfortunately what is not realized and will someday be contested by MLAG in
courts is that if payment had to be made at time of filling complaint it was
the insurer who had to pay. So if anyone has benefited from the interest
accrued over time
the courts have taken to decide
the complaint, it is the insurers. Hence even if the limit of insurance is
exhausted, the interest component should be paid by the insurers.
10) Settlement without a compensation award by
court is an issue which is mentioned in all insurance policies but is
rarely implemented. A policy taken
through a medical association or organization like MLAG gives benefit in such
matters when negotiating with the insurers. MLAG however currently provides
indemnity insurance to about 800 doctors and this number is
very small and does not give us
sufficient clout to deal with insurance companies strictly. Most Medical Associations
make an agreement with a private insurance agent like Securenow / Coveryou /
Apex / Docland and others and let them
carry on their business. This is also not desirable unless premium payments are
made by the association through its account. The individual policies taken by
members on recommendations of their society / association or organization may
be better than individual policies taken by them directly from insurance
companies but are no match on policies taken by a medical organization for its
members. So many times doctors forget to pay the premium in time and MLAG
through its escrow account gets the policy renewed to prevent lapse.
11) The most important reason why a doctor should
take a proper and valid indemnity insurance is the discrepancy between what we
charge our patients in India and hence our
earnings / savings vs the enormous
amounts which are routinely awarded as compensations by the courts. Simply put,
we cannot afford to pay the compensations in crores awarded by the courts from
our pockets even if we wanted to.