The Financial Benefits Of Having Doctor’s Indemnity Insurance

Introduction

When we do business it requires some kind of insurance. Business needs insurance for everything from general liabilities to properties. Every insurance is needed when a company is at loss. It doesn’t allow the company to single-handedly pay full losses. This insurance is termed “Indemnity Insurance.” This insurance assures the insurance holder that it will cover any loss faced by his organisation. This insurance intends to protect business owners and professionals in case they are found accountable for any malpractices or misjudgement. 

Contents

1. Indemnity Insurance and its Working

2. Features of Indemnity Insurance

3. Importance of Indemnity Insurance for Doctors

4. Benefits of Professional Indemnity Insurance

5. Frequently Asked Questions

Indemnity Insurance and its Working

Indemnity Insurance is a contract that binds the policyholder and insurance provider and obligates the insurance company to pay for the loss of the company. The financial loss that the insurance company covers is in exchange for the premium payments made by the policyholder. When you pay for a loss or harm it is termed “indemnifying someone”. 

Working

Indemnity insurance protects an organisation or an individual from financial losses that are caused due to professional negligence or malpractices. In cases where a client sues an organisation for causing the client financial harm due to the organisation’s bad performance. In simpler words, it helps in shifting the blame on the other party.

Clients who face losses come with a civil claim. In answer to it, the insurance will cover everything, the cost of the legal battle as well as any damage that is awarded by the court. How much exactly insurance will cover is determined by the terms illustrated in the contract.

Indemnity Insurance costs can be influenced by several factors which include the frequency of indemnity claims.

There are three different types of Indemnity Insurance. They are-

1. Malpractice Insurance: It is meant for the protection of medical professionals from any legal actions.

2. E & O Insurance: E & O means Errors and Omissions. This insurance protects people and organisations from claims of errors, negligence, and misinterpretation of their services.

3. D & O Insurance: D & O means Directors and officers. If a third party sues the directors or officers of an organisation for their management skills of an organisation, then the personal assets of these people are protected under this insurance.

Features of Indemnity Insurance

Indemnity Insurance offers several features. Some of these features are-

1. It covers Civil cases in which the organisation is sued for damage and is asked for compensation.

2. The scope of coverage covers legal costs, run-offs, damages and compensations, etc.

3. It is valid for people in various fields like medicine, health, law, finance, accounting, and construction.

4. The cost incurred in fighting legal battles and paying any compensation said by the court is covered by the insurance.

5. The organisation should pay premium payments to the insurance provider until the expiration of the contract to enjoy the benefits of the insurance.

6. Cases that are covered by indemnity insurance are low-risk cases but at the same time are quite expensive.

Importance of Indemnity Insurance for Doctors

The number of people in service-based professions has increased tremendously over time. Hence, the sector has seen a growth in the need for Indemnity Insurance for professionals. According to reports given by the media, around 98000 cases of medical negligence are reported every year in India. Doctors are responsible if a patient gets an injury or dies in the process of treatment. These kinds of errors by doctors are increasing over time. If in such cases the doctor has to fight a legal battle he can come to the roads and lose all his life’s savings. Indemnity Insurance protects doctors from facing such huge financial losses and false allegations. It also protects the dignity and reputation of the doctor from being at stake. 

Benefits of Professional Indemnity Insurance

Here are a few benefits of Indemnity Insurance for professionals. 

1. Preparation from unseen risks: Indemnity insurance prepares you for unforeseen circumstances. If you have to be dragged to court, the cost of a legal battle can be very high. Professional indemnity protects you in these situations. 

2. Practice is kept running: If you have suffered a loss, the insurance ensures that your organisation is kept running smoothly and your employees’ job security is intact.

3. Assets are kept safe: In tough situations, the insurance covers your finances so that you don’t have to mortgage your assets.

4. Pays Legal Costs: All legal costs including any compensation said to be paid by the court are paid by the insurance. 

5. Confidence Booster: If you keep fearing mistakes you’ll never be able to perform well. Indemnity Insurance increases your confidence and allows you to take risks and perform better.

Frequently Asked Questions

Q1. What are the financial benefits of having doctor indemnity insurance?

Ans: There are several financial benefits of Indemnity Insurance for doctors. It protects the dignity and reputation of doctors that are at stake. It also fights the legal battle on doctors’ behalf so that its practice is not stopped. It also helps doctors from not running out of their life savings.

Q2. How can Doctor’s Indemnity Insurance help me manage the costs of defending against malpractice claims?

Ans: It protects the doctor from slanders. It covers all the costs in case a doctor is sued by a patient for injury, harm, death, or any financial loss. Financial loss to patients occurs due to the doctor’s consultation, advice or services.

Q3. Does doctor indemnity insurance provide any financial assistance to cover damages awarded in malpractice lawsuits?

Ans: All medical professionals are protected by Indemnity Insurance against any lawsuits. Any legal actions taken by patients who have suffered mental or physical harm are covered under this insurance. Indemnity insurance covers settlements, court fees, and other costs.

Q4. Are there any tax benefits associated with having Doctor’s Indemnity Insurance?