What is professional indemnity insurance & why should doctors care?

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What is professional indemnity insurance and why should doctors care?

  • Highlights

  • Risks of negligence, omission or error

  • Legal consequences and severe financial setbacks

  • How to protect against financial liabilities/ losses

  • Prepare for unseen risks, keep your assets safe & clinic running

Curing people and treating them from chronic diseases is a noble profession. However, the profession brings along with it serious complications. In case of a mishap, doctors face legal consequences of being sued. If the case is lost, they may face a financial setback as the compensation payable to the patient or his bereaved family can be a hefty sum. This is where a professional indemnity policy could come to their rescue.

Sell more; and sell to more:

Identify the top 20% of your customers who account for 80% of your sales. You may need to do a Pareto Analysis to draw these insights. Once you know who your most profitable customers are, focus on them and try to increase revenues. You can deploy various marketing campaigns to achieve this. Next, create a strategy to help your business acquire new customers. To do this, ask yourself these questions:

Do you need to invest more in a vertical that was previously left untapped?
• Do you need to change or improve the services you provide to your bottom 40%?
• Do you have a new product idea that will help you draw more customers?
• Based on these answers, invest in diversifying and attracting a new revenue stream.

Cut costs:

No matter whether you’re taking an aggressive approach towards minimizing losses, cost-cutting should be first on the agenda. These measures can help your business become leaner and more efficient. You can use better technology to streamline your processes and increase the overall efficiency of the system. Other simpler cost-cutting measures include shedding surplus stock via sales programs, sell off assets that are of minimal use but carry a big liability, or use Just-in-Time stocking to keep your inventory levels at their optimum and prevent overstocking. Cutting staff costs can also work in your favour.

Boost cash reserves:

At a time when you’re not earning anything from your business, investing more money in it can seem like a bad idea. But remember the adage, fortune favours the brave. Sell off any ready stock you have at a discount or look at other ways of selling such as going online. Boosting your treasury can act as a lifeline for your business, helping it sustain itself during the crisis. If you can get your business through its loss phase without losing employees and goodwill, the demand will eventually increase. Pay your staff on time, and take care of working capital needs via a business loan customised for SMEs.

How doctors can take their practice to the next level 

What Are the Benefits of Professional Indemnity Insurance?

Prepares you for unseen risks
It is difficult to set up a fund with an accurate amount to pay for future compensations. The amount of the legal case may be large or small- and is difficult to anticipate. An indemnity insurance cover helps you to stay prepared for any unscheduled moment.
Keeps your practice running
Without a good insurance plan in place, your business might have to pay for the losses incurred from legal suits. The insurance plan prevents this; and, ensures the smooth functioning of your business and job security of your employees.
Keeps your assets safe
You may have to sell or mortgage your professional and/or personal assets to pay the compensation. An indemnity insurance cover acts as a financial backup to fall upon in such risky times.
Pays your legal costs
With a good indemnity plan in place, you can afford to hire a good lawyer and get the best legal support available. This increases your chances of winning the case. It might help you minimize your losses as well as your reputation.
Boosts your confidence
The fear of mistakes shouldn’t come in way of your duties. Professional indemnity insurance helps you approach your professional commitments with more confidence and take greater risks. Without such a cover, you may feel intimidated and be afraid of the consequences at every step thereby reducing your professional output.

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