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Can hospitals cover fire accidents through insurance?

Can hospitals cover fire accidents through insurance?

On 6 November 2021, a fire broke out in the ICU ward of the Ahmednagar Civil Hospital, Maharashtra. The ensuing flames and black smoke resulted in the deaths of 11 COVID-19 patients, while 6 others sustained burn injuries.

The ground floor of the ICU was entirely engulfed in thick black smoke, making it harder for hospital staff to rescue trapped patients. It took the Fire Brigade half an hour to contain the situation but by then it was too late.

Further investigation revealed that despite adequate funds provided to the hospital, the fire-fighting equipment was deficient. They allegedly had no fire sprinklers, hydrants or even smoke detectors. Subsequently, a medical officer and three staff nurses were arrested on the charge of causing death by negligence.

This wasn’t an isolated incident. Between 2020 and 2021, there have been more than 25 cases of hospital fires in India, causing over 100 deaths.

Given the high risk of fire accidents, how can hospitals financially recover from such disasters?

Similar to all business establishments, hospitals cover such risks through Fire and Allied Perils Insurance. This commercial insurance policy covers any kind of property damage that may occur as a result of perils like, fire, floods, riots, strikes, malicious damage, land subsidence, among several others.

Furthermore, a General Liability Insurance policy can help hospitals pay compensation to the victims and families when an event like a fire occurs on hospital premises.

However, in the Ahmednagar case, since the deaths of the patients and the inordinate spread of fire were caused by the negligence of the hospital officials and staff, no insurance payout can come to their rescue.

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Further Reading

Fire and Allied Perils Insurance covers much more than fire. Explore all its inclusions and exclusions here