- By Team Policy Era

Smart Coverage Choices

Stepping into the world of medicine is exciting, but it is also a world full of responsibility. For doctors in India, safeguarding your reputation and financial security is no longer optional; it is essential. One of the key tools for this protection is Professional Indemnity Insurance.

Unfortunately, many new doctors, in their eagerness to start practice or join hospitals, make mistakes when buying or maintaining their indemnity policies. These mistakes might seem small, but they can lead to devastating consequences in the case of a medico-legal claim.

In this article, we will explore the five most common pitfalls doctors face with indemnity insurance, why they matter, and how you can avoid them.

1. Buying Too Little Cover

This is the most frequent error made by new practitioners. When purchasing indemnity insurance, doctors often go for the cheapest plan available, thinking any cover is better than none. While that logic seems sensible, it falls apart in real-world scenarios.

Medical negligence cases in India have seen compensation amounts rise drastically over the past decade. Courts have awarded compensation running into several lakhs or even crores, especially in cases involving surgical errors, maternal deaths, or child disabilities caused by alleged negligence.

Imagine this:

• You buy a policy with ₹10 lakh coverage because it fits your budget.
• A claim arises, and the court awards ₹75 lakh to the patient.
• The insurer pays ₹10 lakh, and you are personally liable for the remaining ₹65 lakh.

This can wipe out years of earnings, push you into debt, and tarnish your reputation permanently.

How to Avoid This Mistake:

✔ Assess your speciality risk – Surgeons, gynaecologists, anaesthesiologists, and radiologists generally require higher cover than general practitioners.
✔ Consider your practice size and patient load – More patients mean more exposure to risk.
✔ Start with a realistic minimum – For urban specialists, at least ₹50 lakh cover is advisable; for super-specialists, even ₹1 crore is not unusual.

Remember: Indemnity insurance is not an expense; it is an investment in your professional security.

2. Ignoring Claim History

Another common pitfall is assuming your past does not matter when buying a new policy. But insurers do check your claim history before issuing or renewing cover. If you fail to disclose previous incidents, even minor complaints, it could be considered misrepresentation.

In such cases, the insurer has the right to reject your claim, leaving you exposed when you most need protection.

For example:

A young surgeon faces a patient complaint that gets settled amicably, without going to court. He does not report it to his insurer when renewing his policy. A year later, another claim arises, and during the investigation, the insurer finds out about the previous settlement. Result? The claim is rejected for non-disclosure.

How to Avoid This Mistake:
✔ Always declare any previous claims or settlements honestly, even if you think they are insignificant.
✔ Keep proper documentation of complaints and resolutions for transparency.
✔ Understand that full disclosure builds trust and prevents policy cancellation or claim rejection later.

3. Not Reading Policy Exclusions

Doctors are often pressed for time and assume that once the premium is paid, “everything is covered.” Unfortunately, this is far from reality. Every indemnity policy has specific exclusions and being unaware of these can lead to unpleasant surprises.

Common exclusions include:

• Criminal acts or fraudulent behaviour
• Cosmetic procedures without informed consent
• Practising outside your declared speciality
• Employment disputes or defamation cases

For example, if you perform a hair transplant (a cosmetic procedure) without proper documentation and consent, and the patient sues you, your insurer may refuse to pay.

How to Avoid This Mistake:
✔ Take the time to read the policy wording carefully.
✔ Ask your insurer or advisor for a clear explanation of exclusions in simple language.
✔ Ensure that your policy aligns with your actual scope of practice—and update it when your practice expands.

4. Depending Solely on Employer’s Cover

Many doctors employed in hospitals or corporate chains assume that the employer’s indemnity cover is sufficient. But this assumption is risky.

Employer-provided policies are designed primarily to protect the hospital, not the individual doctor. If a medico-legal case arises, the hospital may defend itself aggressively, and your interests might not align with theirs. In some cases, hospitals even recover compensation from doctors through salary deductions or legal action.

Consider this scenario:
A hospital’s policy covers “hospital liability” but excludes doctors’ personal negligence. The patient sues both the hospital and the attending doctor. The hospital uses its policy to settle its share but leaves you to fight your case alone.

How to Avoid This Mistake:
✔ Always buy your own personal indemnity policy, regardless of your employment status.
✔ Make sure your policy covers legal defence costs, as these can be extremely high.
✔ Do not assume corporate backing equals personal protection; it often does not.

5. Missing Annual Renewals

This mistake is deceptively simple but extremely dangerous. If your policy lapses even for a single day, you may face a period without cover. And remember, claims can arise from incidents that happened during an uncovered period, even if you were insured before and after that gap.

Additionally, some policies operate on a “claims-made” basis, meaning they only cover claims reported during the active policy period. A lapse could break this chain and leave you unprotected.

How to Avoid This Mistake:
✔ Set multiple reminders well before the renewal date.
✔ Opt for auto-debit or standing instructions to avoid accidental lapses.
✔ If you switch insurers, ensure continuous coverage by overlapping start dates.

Why Avoiding These Pitfalls Matters

Medical professionals today face a higher risk of litigation than ever before. Increased patient awareness, consumer protection laws, and aggressive legal marketing have led to a surge in medico-legal claims.

By avoiding these five mistakes, you are not just protecting your finances, you are safeguarding your reputation, mental well-being, and ability to practice medicine without constant fear.