Scenario: a private hospital is ordered to pay VND 1.5 billion to a patient’s family for a doctor’s professional error. Uninsured, it pays everything itself — cash flow strained. Is professional liability insurance mandatory, and what does it cover?
Professional liability insurance: a duty under the Law
The Law on Medical Examination and Treatment 15/2023/QH15 obliges medical establishments to buy professional liability insurance for practitioners — a duty, not a voluntary choice. Purpose: securing compensation funds for patients upon professional errors while shielding establishment and practitioner finances against large awards. Skipping this insurance is an administrative violation; and when incidents occur, establishments bear full compensation alone, as above. Individual practitioners (doctors opening private clinics) equally need cover — small scale never lightens compensation liability.
Coverage scope and fine print
Medical professional liability policies typically cover: compensation amounts establishments or practitioners must pay patients per court judgments, Professional Council conclusions or settlements; legal costs (lawyers, expert assessment) in dispute resolution — per terms. Fine print to read: maximum limits and deductibles — many establishments buy limits far below real risk; exclusions (intentional breaches, out-of-scope practice, intentional serious professional violations); duties to notify insurers upon incidents — late notice may void claims; and time scope (incidents occurring within the policy period vs claims arising within it — different mechanisms requiring clear understanding of which was bought).
Insurance never substitutes professional compliance
The key emphasis: professional liability insurance is a financial safety net, not a “licence to err”. Insurers may deny or recover where errors stem from intentional, fraudulent or “underground” practice (unlicensed, out-of-scope). Moreover, insurance pays only financial losses — never hospital reputation, never preventing suspension or licence revocation for serious violations. The right strategy: invest in patient safety, professional procedures and continuous training to minimise incidents (premiums also fall with clean claims histories) — and maintain full insurance as the final protective layer.
Frequently asked questions
Doctors working at multiple establishments — insurance how?
Each establishment must insure its practitioners. Multi-site doctors must ensure every site’s cover — or buy supplementary personal insurance. Incidents at a given establishment trigger that establishment’s (and/or personal) insurance.
Insurer denying claims?
Check contractual denial grounds: baseless denials entitle establishments or practitioners to complain about and sue insurers under the Insurance Business Law 08/2022/QH15. Keep complete incident dossiers and notify insurers timely to protect rights.
Does insurance pay when doctors face criminal prosecution?
No — professional liability insurance pays civil compensation, excluding criminal fines or criminal defence costs (unless rare bespoke terms). Criminal liability is personal and non-transferable to insurance.
This article has been quality-reviewed by the FLAW AI Legal Council.