The Supreme Court of India has held that insurance companies covering doctors are liable to compensate for negligence to the extent of their liability under the policy. The judgment arose from an appeal in the case Nagarmal Modi Sewa Sadan v. Prem Prakash Rajagaria & Ors., where the doctors working at a hospital were found negligent, resulting in a patient’s death.
The New India Assurance Co. Ltd. had issued a policy covering doctors employed by Nagarmal Modi Sewa Sadan hospital. A patient had died during treatment at the hospital, leading the complainant (Respondent No. 1) to file a case before the National Consumer Disputes Redressal Commission (NCDRC) claiming compensation on the grounds of medical negligence.
In February 2013, the NCDRC found the hospital and its doctors liable for negligence and ordered them to compensate the complainant. The hospital subsequently challenged this order before the Supreme Court.
Supreme Court’s Verdict
A bench comprising Justices A.S. Bopanna and Dipankar Datta refused to interfere with the NCDRC’s findings, stating that the conclusion of negligence was well-supported by evidence, including a report from AIIMS hospital.
The Court upheld the NCDRC’s decision, confirming that the doctors working at the hospital were negligent, and thus, the insurance company was liable to reimburse the compensation to the complainant, but only to the extent of its coverage under the policy.
Insurance Company’s Liability
The insurance company argued that the hospital could not claim the policy’s benefits, as it was issued in the names of the doctors and not the hospital. The Supreme Court, however, rejected this argument, highlighting that both the hospital and the doctors were named in the NCDRC case. Since the doctors were found liable for negligence, the insurance company was required to compensate according to the policy’s terms.
The ruling directed the insurance company to pay compensation up to the extent of its liability, with the remaining amount to be paid jointly by the hospital and the doctors.
The Supreme Court reaffirmed the principles of liability in cases involving medical negligence, ensuring that insurers cover the doctors’ liabilities as per their policies. The judgment provides clarity on the extent of an insurer’s responsibility when doctors are insured and found negligent.
Case Title: Nagarmal Modi Sewa Sadan v. Prem Prakash Rajagaria & Ors.