Is it permissible for a Muslim doctor in the West to buy indemnity insurance?

The following is the European Council Fatwa on this matter:

“There are situations and environments that require solutions to address special conditions and meet their requirements, as is especially the case of the Muslims in Europe, where commercial insurance prevails, and there is a dire need to benefit from it in order to prevent the dangers to which they are often exposed in their life in all its forms, especially in the absence of an Islamic alternative – Takaaful (cooperative) insurance – and the difficulty to find it at the present time. Therefore, the Council issues a Fatwa to the effect that commercial insurance is permissible in the following cases and what is similar to them:

– Cases where insurance is legally binding, such as the case of third-party insurance on vehicles, machinery, equipment, workers and employees – social security or retirement – and some cases of health or educational insurance and the like.

– Cases of need for insurance to ward off difficulties and severe hardship, whereupon the existing deceit clauses in commercial insurance policies is forgiven. Examples:

a. Insurance on Islamic institutions such as mosques, centers, schools, and so on.

b. Insurance on vehicles, machinery, equipment, houses, and professional and commercial establishments in order to ward off risks that cannot be covered, such as fire, theft, and the malfunction of the various facilities.

c. Health insurance in order to avoid the high costs that may be incurred by the beneficiary and his family; this is either because of the absence of free health coverage, its slowness (in providing the health service), or its low quality.”

[End of Quote]

The fundamental principle is that purchasing commercial insurance policies is generally impermissible. However, exceptions may arise in specific situations, mainly when a significant need exists. For example, in Muslim communities within Western countries, where no Sharia-compliant alternatives are available, exceptions may be considered. Doctors, for instance, might face substantial fines and court-imposed payments that they cannot afford or would impose severe hardship. In such cases, purchasing insurance policies to mitigate these harms may be permissible. This approach aligns with the previously mentioned European Council resolution, which allows for the purchase of commercial insurance policies in these circumstances to “alleviate difficulties and severe hardship.”