Introduction
Even though insurance can take many forms, it serves the general purpose of providing security for those who purchase it to provide predictability in uncertain situations. When unforeseen or undesirable events happen, insurance can provide a means of compensating for any losses that are caused as a result. By distributing the cost of losses across a large number of individuals, insurance aims to minimize the risk of loss experienced by individuals and organizations. This mechanism is used to protect them against the possibility of loss. Upon the analysis of actuarial projected losses, formulas are developed to determine the payment of premium dollars to contribute to the coverage reserves, which are then calculated based on the law of averages. Any member of the group who suffers from a defined loss during the year is eligible for a compensation plan from these reserves.
The necessity of purchasing insurance is well-known to emergency medicine physicians. Many aspects of personal and professional insurance are unfamiliar to them. A wide range of insurance products is available and affordable to help protect our lives and careers, whether it is a car, a life insurance policy, a health insurance policy, or a professional liability policy. It is well known that the insurance industry is complex and that very few physicians have an understanding of its terminology, structure, and mechanics concerning medical malpractice insurance.
This article helps in understanding the concept of medical malpractice insurance and its concepts.
Understanding the concept of medical malpractice insurance
There is a misnomer referred to as Medical Malpractice Insurance (MMI) that is often used to describe Medical Professional Liability Insurance (MPLI). It is a type of insurance which is purchased by physicians or healthcare institutions to shield them from the financial risks and liability associated with practising medicine. In more precise terms, it protects the physician if a patient claims that they have been injured due to the doctor's negligence and the physician claims to be responsible for the injury. Typically, in order to buy this insurance, a contractual agreement called a policy is arranged in exchange for an agreed-upon fee. There will be a provision in the policy that the insurance company will assume financial responsibility for the defence and payment of claims against the policyholder (physician), up to a limit of coverage (liability limit) which will apply for a specified period (period of coverage). The risk of professional liability is transferred to the insurance company when physicians purchase commercially available professional liability insurance.
The insurer assumes responsibility for any claims made against them upon payment of the premium and places the insurance company instead of themselves at risk for any loss incurred in defence or resolution of the claim. Some coverage is usually excluded from the policy. There are several types of excluded coverage, including intentional misconduct and sexual misconduct, which are not covered by insurance. Medical professional liability insurance covers third parties, which means that the insurer pays benefits to those not included in the policy (usually the injured person or their family). Indemnity is the term used to describe this type of reimbursement. The majority of insurance policies also provide first-party coverage for the physician's defence costs, regardless of whether indemnification is awarded.
The inclusions
The following are a few of the inclusions of Professional Indemnity Insurance that you should be aware of:
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Depending on the profession, the type and scope of coverage may vary. It protects against the legal charges made by a patient’s estate in the event of a death or bodily injury for medical professionals such as doctors, cardiologists, pathologists, and surgeons.
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As part of this policy, the insured can also add other doctors working under him, partners, or assistants to work under him, as long as those doctors are invited to participate in the defence.
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There is coverage under the policy for errors or omissions that are unintentional.
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As a result, an individual is protected from the cost of defending themselves in the case of legal action.
The exclusions
The following reasons for the practice may not be covered by Professional Indemnity insurance.
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Treatment for medical conditions such as plastic surgery, weight loss, genetic damage, and AIDS-related conditions.
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Damages, fines, and penalties result from disciplinary actions, criminal acts, and criminal acts.
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Having lost goodwill.
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Intentionally ignoring a legal obligation, non-compliance with a legal obligation, willful negligence.
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Narcotics or alcohol are used during medical practice.
Key points to remember
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Difference between Medical Malpractice Insurance and Professional Liability Insurance: Often called errors and omissions insurance, medical malpractice insurance is a form of professional liability insurance. There is a key difference between these two terms, even though they can be used interchangeably. Having medical malpractice insurance will protect you against the financial burden of legal expenses, including judgments and settlements in cases where you might be held liable for the death or injury of a patient. However, if you make an error in the course of conducting your business, your professional liability insurance will cover you.
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Cost of the policy: A doctor or medical practitioner's speciality determines the cost of the policy. There is a difference in cost between claims-based and occurrence-based policies, which depends on the type of policy. The cost of the policy is determined by the policy's claim limit. As well as the past loss history, the cost of the policy is determined by the medical experts as well as the location and legal laws of that specific area.
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Disadvantages: It is possible for insurance companies to include consent to settle clauses in their policies, which allow them to reject a claim without seeking medical experts' consent. As a result of the loss history and the laws of the area, the insurance company can impose harsh covenants as well as limit the amount of the settlement for a practising medical professional.
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Obtaining malpractice insurance is possible via three different sources: a private insurer, an employer, or an organization like a medical risk retention group (RRG).
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Complying with Consumer Protection Act: To comply with the Consumer Protection (Amendment) Act 2002, doctors and hospitals must obtain separate liability insurance policies and renew them every year.
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Indian Organizations offering Medical Malpractice Insurance: For medical practitioners in India, there are a number of insurance companies that offer indemnity policies. Among the services available are:
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Indian Medicolegal Consulting Services: As opposed to routine insurance companies, medicolegal companies or professional protection groups handle all medical legal and administrative issues. The company Indian Medico Legal Consulting Services Pvt. Ltd. (see here) provides insurance services. Whenever an advocate or a court notifies you or if the police issue you a warrant, you should contact the Medicolegal Company. Additionally, if a dispute arises with a patient, an administrative or hospital-related problem occurs, or a patient dies during an operation or procedure, the company should be contacted.
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The IMA National Professional Protection Scheme: The National Professional Protection Scheme of the IMA (see here) was designed to provide protection and assistance to its members in the event that they are harassed or litigated during the course of their professional activity. Furthermore, it is intended to provide legal aid to its members. The Scheme is open only to lifetime members of the IMA.
Conclusion
There is a greater awareness of the rights of the public as well as the duties of doctors. The public also knows that if they are wronged they will have their day in court. Furthermore, consumers are also more empathic when dealing with the judicial system. As a result, doctors will be held more accountable for their actions. It is however important to note that doctors cannot be harassed or punished unnecessarily. As a result of the professional indemnity policy, the consumer is covered in the event of a liability claim. There needs to be careful consideration by the doctor that the sum assured should not be too small. Regular renewal of the policy is important so that one is covered at the time of the event as well as at the time of submitting a claim and being paid out. A person should take into account past experiences if he or she plans to change the insurer in the future. When this happens, a run-off cover can be very helpful.
Numerous factors determine the amount of coverage obtained, such as affordability, institutional requirements, the level of protection desired to protect assets, and trends in judgments and settlements. Risk acceptance and asset protection are important factors in determining policy limits. It is important to understand that when the entire risk pool is examined, the limits provided by the insurance pool can provide a sufficiently adequate level of protection for the physician if the physician is insured via an insurance pool.