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Do doctors need indemnity insurance in India?

Do doctors need indemnity insurance in India?

29-Aug-2025

Medical Negligence

Answer By law4u team

In India, indemnity insurance for doctors is not legally mandatory, but it is strongly recommended and widely practiced. Purpose • Protects doctors against financial liability arising from claims of medical negligence, errors, or omissions. • Covers legal expenses and compensation awarded to patients if the doctor is found liable. Why it is important • Medical negligence cases in India can lead to very high compensation amounts (as seen in V. Krishnakumar v. State of Tamil Nadu, where over ₹1 crore was awarded). • Even if a doctor is ultimately found not guilty, legal defence costs can be significant. • Hospitals increasingly require their doctors to have indemnity coverage as part of employment contracts. Typical coverage • Offered by insurers like New India Assurance, Oriental Insurance, ICICI Lombard, etc. • Covers civil liability but generally excludes criminal acts, willful negligence, and procedures performed under the influence of drugs/alcohol. In short — it’s a safety net for doctors, and in today’s litigation-prone medical environment in India, working without it is risky.

Answer By Ayantika Mondal

Dear Client, In India although professional indemnity insurance for doctors is not at this point a legal requirement or a must, it is in high demand and is put forth as a must for all medical practitioners. The "Why" behind the "Need" In India there is a rise in medical negligence and malpractice lawsuits which together with growing patient awareness and large compensation awards by consumer courts has made this insurance a must for a doctor’s financial and professional security. Here is the analysis of why it is so important:. Financial Protection: In one lawsuit which may play out a large legal team can be run up, along with high court costs and also the possibility of sizeable awards against you. Professional indemnity insurance is what a doctor should have in this case as it will cover those assets and savings which that large scale financial disaster would otherwise touch. Coverage for Legal Costs: Even though a claim may be without merit or rejected by the court, a doctor still has to pay for legal defense. This insurance which in turn pays for these costs so that a doctor does not from his own resources prove his innocence. Peace of Mind: Litigation at any time is a source of stress and burn out. With an indemnity policy in place we see a greater peace of mind which in turn allows doctors to put their full effort into what they do best giving high quality patient care free from the worry of financial ruin due to a fair accident. Coverage is not a singular issue for doctors. We also see that hospitals, clinics, nurses, and other health care providers are included. Also what we have includes issues related to the actions of trained assistants and the doctor’s staff. Retroactive Cover: Many policies include “retroactive coverage” which means they will pay out for incidents that took place before the policy was bought out as long as the doctor had had continuous insurance. This is a very important feature which protects against latent or delayed claims. Key Things to Consider When a doctor looks into an indemnity policy they should consider the following:. Coverage Amount (Sum Insured): In the past we have seen an increase in the amounts of court awarded compensation. Also it is important to determine a sum insured which is enough to cover what is at risk according to the speciality of the doctor (for instance surgeons will require a greater cover than general practitioners). Any One Accident (AOA) Limit: This is the highest payment out of pocket which the insurer will cover for any one claim. Any One Year (AOY) Limit: This in total what the insurer will pay out for all claims in a policy year. Exclusions: It is important to see which things the policy does not include for instance criminal acts, intentional non compliance, or procedures which were performed while under the influence of narcotics or alcohol. In short although professional liability insurance is not a legal requirement by which we are all tied, it is a very important element of risk management for medical professionals in India which in turn protects their reputation, financial security, and peace of mind in a very litigious setting. I hope this answer helps to resolve your queries. Don’t hesitate to reach out with any further questions. Thank you!

Answer By Anik

Dear Client, It’s true that in India there isn’t a legal requirement for all doctors to have indemnity insurance, but it is very much advised. It is a very important issue for medical professionals in the face of the increase in medical negligence suits. Here is an overview of why it’s so important:. Financial Protection: Indemnity insurance protects doctors against the issue of high legal defense costs, court fees, and also the issue of having to pay out in the case of a suit for which they did not intend, a mistake was made, or when they were negligent. In which case one lawsuit could put a doctor out of business. Growing Litigation: In India there has been a large increase in medical malpractice cases which is due to greater awareness of patients and their families of what they are entitled to. Also if the claim put forth is found to be without merit the doctor is still responsible for covering the legal fees of defense. Peace of Mind: Having that coverage doctors are able to focus on what they do best without the constant threat of suit which may ruin their practice and personal life. Hospital Requirements: Many health care facilities at present require of their staff physicians which in high risk fields like that of surgery to have current malpractice insurance as a term of employment. While doctors do not report that the National Medical Commission (NMC) makes it a requirement of practice, various medical associations including the Indian Medical Association (IMA) report that it is a standard professional practice which members should follow. I hope this answer helps to resolve your queries. Don’t hesitate to reach out with any further questions. Thank you!