It’s crucial for healthcare professionals actively involved in clinical practice to have professional liability coverage, commonly referred to as malpractice insurance. This insurance safeguards you from potential liability issues related to your profession, such as accusations of malpractice. Having liability insurance is vital for financial security, given that a malpractice claim can be filed against you even after you’ve provided care to a patient.
Liability insurance not only provides financial security but also serves as a shield for your professional standing. A malpractice lawsuit has the potential to undermine your reputation and credentials, possibly leading to the suspension or revocation of your license.
Even if such extreme measures are not taken, your malpractice history becomes part of the public record, which employers may use to disqualify you from future employment opportunities. Therefore, it is crucial to robustly defend against malpractice suits. Insurers are there to offer legal representation, ensuring that your best interests are protected throughout the process.
What is Malpractice Insurance?
Malpractice insurance is categorized as a professional liability covered by healthcare experts. This particular coverage safeguards healthcare insurers from patients who sue them under the claim that they were hurt by the ignorance of professionals. In addition, malpractice insurance also provides coverage for the death of a patient.
How Does It Work?
Few doctors will require obtaining malpractice insurance at some point in their career due to some reasons, like errors. These errors may occur during diagnosis, treatment, or when guiding post-illness care. For instance, about 250,000 deaths in the U.S. each year result from such mistakes. The necessary criteria for medical malpractice insurance differ from state to state.
However, some states request coverage, while others require low coverage for participating in state programs to aid with claims. The cost of medical malpractice insurance premiums is typically determined by the doctor’s specialty and location rather than their claim history.
This means that even if a doctor has never faced a lawsuit, they might still face high premiums. Moreover, various factors include the coverage amount, the severity and frequency of claims, the practice’s location, and the laws governing the matter.
Types of Malpractice Insurance
There are several alternatives for securing malpractice insurance. In addition, an individual or group can secure an insurance policy through a private insurer.
However, insurance can be secured through state and local agencies when circumstances warrant such coverage. There are two main types of policies to choose from healthcare professionals: claims-made policies and occurrence policies.
Claims-Made Policy
The claims-made policy requires that a claim must happen and be announced while the insurance policy is still active with the insurance company. This policy type is the most frequent in medical malpractice insurance.
Additionally, you will need to cover an additional payment for tail coverage to ensure it is designed after the insurer has expired. Tail coverage offers the policy for a specified duration, such as five years post-policy expiration.
However, it is very costly, up to three times the annual premium, but it helps cover potential claims that may arise later on. This option is particularly advantageous when transitioning policies, commencing a new position, or entering retirement.
Occurrence-Made
This type of coverage includes claims made during the policy period, irrespective of when the actual claim is filed, extending its protection even after the policy is terminated.
However, certain insurance companies are less common, and these policies come at a higher cost compared to claims-made policies.
What Does Malpractice Insurance Cover?
Malpractice insurance provides coverage for professionals in cases involving care-related injuries, errors in treatment, medication errors, misdiagnoses, premature discharge from a clinic, and unnecessary surgery.
In addition, coverage extends to various expenses associated with defending and settling claims, including arbitration costs, attorney’s fees, court costs, medical damages, punitive and compensatory damages, and settlements.
Your malpractice policy’s coverage is limited by the policy’s specified limits. These limits are often presented as two figures, such as $1 million or $3 million. Here’s what these numbers represent:
- $1 million is the highest amount your policy will cover per individual claim.
- $3 million is the maximum coverage your policy will cover during the whole policy period, including all claims.
What Does Malpractice Insurance Not Cover?
In addition, certain situations are excluded from coverage in a professional liability insurance policy. These exclusions may include:
- Changes to health records
- Vehicle collisions
- Illegal activities
- Online vulnerability, like exposing data
- Harm to business assets
- Worker injuries
- Allegations of mistreatment or bias towards patients
- Legal actions you initiate
- Patient mishaps
- Inappropriate behavior of a sexual nature
Policyholders need to be aware of these exclusions and understand the limitations of their coverage.
How Much Does It Cost?
The average yearly cost of malpractice insurance for counselors and therapists is $500, while dieticians and nutritionists have an average yearly cost of $365. Lastly, home health aids offer an average yearly expenditure of $110. However, factors determining your malpractice insurance expenses include:
- Your profession
- Experience
- Work frequency
- Past claims lodged against you (if any)
- Your residence
- Policy coverage limits
Malpractice Lawsuit
In a medical malpractice lawsuit, the plaintiff is required to prove that a healthcare professional breaks from the accepted standard of care for a patient. Generally, three occurrences must take place:
- The plaintiff’s legal representative must show that there was a violation of the medical procedures. This makes the practitioner choose a course of action different from what a peer in the same field would have chosen.
- The medical professional’s actions must inflict physical or emotional harm on the patient.
- Adequate proof must be presented to show the medical professional the resulting harm.
How To Find the Best Malpractice Insurance
Malpractice insurance helps safeguard oneself from negligence, carelessness, or errors resulting in physical harm to another person. However, it’s crucial to get the best malpractice insurance.
Verify Whether your Employer Provides Medical Malpractice Insurance
Before seeking a policy elsewhere, check if your workplace offers this coverage or discounted group insurance for its staff. Despite employer-provided options, it’s advisable to consider securing an individual policy for yourself.
Determine the Appropriate Coverage for Your Needs
Malpractice insurance varies, with options ranging from $100,000 per incident and $300,000 annually to $1 million per incident and $3 million annually. However, consult your insurance agent to align the coverage with the specific risks associated with your profession.
Compare Quotes From Various Providers
If you have a business owner policy, inquire about the cost of adding medical malpractice insurance to your current coverage. Bundling different types of coverage with the same insurer is frequently more cost-effective than purchasing separate policies from different companies.
Conclusion
Malpractice insurance, commonly known as professional liability insurance, provides coverage for healthcare professionals facing claims related to injury and medical negligence. Medical practitioners like physicians, nurses, physical therapists, and others often carry these policies to safeguard themselves from specific liability claims and associated damages.