Understanding Medical Malpractice Insurance

Many doctors experience various issues over the course of their careers when attending to patients. Some of the problems the patients encounter during treatment often lead to medical lawsuits. When a patient suffers harm due to a physician’s negligence or lack of knowledge, they can sue the medical practitioner for the damage. The medical practitioner may be liable for the damage and injuries.

Unfortunately, the damages may be huge. The practitioner may have to pay a lot of money to the patient for the injury or harm caused. This is where medical malpractice insurance comes in.

Whether a doctor, nurse, hospital administrator, physician, or office manager, you may need medical malpractice insurance to protect you from future losses if a patient sues you over medical negligence. This guide gives a clear guide to medical malpractice insurance to help medical professionals to make informed decisions.

What Is Medical Malpractice Insurance?
Medical malpractice insurance, also known as medical professional errors or omissions insurance, protects medical professionals and other licensed health workers from liability that may come after medical malpractice.

Types of Medical Malpractice Insurance
There are different types of medical insurance. Depending on your preferences and needs, you can purchase malpractice insurance as an individual or a group. Here are the types of medical malpractice insurance.

Claims-Made Policy
This policy covers claims for the damage reported when the policy is continuously in effect and only for claims recorded during continuous coverage. If the claims-made policy gets canceled before a patient files a claim, the policy would no longer cover the damages caused by the physician, even if the policy existed when the alleged medical malpractice occurred.

Occurrence Policy
An occurrence policy covers incidences or claims that happen within the policy period. This includes when a patient files a claim, after the policy elapses, or when canceled. This coverage can be more costly than claims-made coverage because of the coverage period, but you don’t need to purchase tail coverage after cancellation.

Claims-Paid Policy
This policy applies during the payment of the claim rather than when the claim got reported. The premiums for this policy work for claims that got settled the previous year and claims anticipated to be settled next year. The claims-paid policy is only effective while the policy remains alive.

Tail Malpractice Coverage
Tail malpractice policy, or extended reporting coverage, is a liability covering medical professionals that canceled claims-paid or claims-made policies. This policy works for medical malpractice that occurred during the previous plan’s coverage of the physician.

What Does Medical Malpractice Insurance Cover?
Medical malpractice insurance covers many elements that protect physicians from huge financial losses. Below are the related claims that medical malpractice insurance covers.
• Bodily injury
• Medical and expenses
• Errors in treatment
• Mental anguish injury
• Care-related injuries
• Attorney fees and court costs
• Misdiagnosis
• Premature hospital discharge
In most cases, the bigger part of malpractice insurance goes towards claim investigation and defense, depending on the complexities involved in the claim and the harm caused by the physician.

What Doesn’t Medical Malpractice Insurance Cover?
Medical malpractice insurance does not cover the following elements.
• Sexual misconduct
• Cyber liability cases such as data breach
• Auto accidents
• Criminal acts
• Alteration medical costs
• Patient accidents
• Employee injuries
• Patient abuse of discrimination claims

Factors to Consider when Buying Medical Malpractice Insurance
With multiple medical malpractice insurance providers today, learning how to choose the best policy provider is important. Here are the factors to guide you when purchasing medical malpractice insurance.

Liability Limits
Insurance companies place limits on medical malpractice coverage between $1,000,000 and $3,000,000. The insurer will only pay damages up to the maximum coverage per claim within a year. Physicians who incur costs above the liability limits may pay the remaining costs from their pockets. This can be costly in the long run, so checking the policy limits before signing up for malpractice insurance is essential.

Premium Discounts and Credits
Before choosing a malpractice insurance provider or signing up for medical malpractice coverage, it is important to check whether the insurer offers discounts and credits. This can save you a lot of money in the long run. Credits and discounts may include part-time discounts, claim-free history, group discounts, risk management risks, new doctor discounts, deductibles, professional membership, and Joint Commission on Accreditation of Healthcare Organizations (JCAHO) discounts.

Defense Costs
Handling medical malpractice lawsuits can be costly. You may need to pay an attorney, expert witness, and court expenses. Consider signing up for malpractice insurance with defense costs inside the limits. During claim payment, they will subtract the defense costs from the available liability coverage. Defense costs outside the policy limits may be capped in their separate limit. In this case, it’d be best to consider unlimited defense costs outside the liability limits.

Exclusions
Physicians should understand the elements included in the policy before signing up, such as what the policy will cover and what it will not. This way, the physician can make informed decisions when a patient sues them for medical malpractice-related cases. For instance, since malpractice insurance does not cover sexual misconduct, the medical professional will not rely on malpractice insurance to pay the patient the damages incurred.

Malpractice Insurance Costs
The cost of malpractice insurance is another leading factor that can help medical professionals to determine suitable coverage. Many factors determine insurance costs. This includes the profession, years of experience, policy limits, location, previous claims filed against them, and how often they work. Before signing up for the policy, it’d be best to check all the leading elements above to help make informed decisions.

The Bottom Line
If you’ve been wondering whether medical malpractice insurance is beneficial, this is the time to take a step and protect your practice from unforeseen future events that may affect your business. You can research different types of insurance companies and sign up with an insurer that can help you meet your needs should a patient file a claim against you. It is all about protecting your practice against financial losses and avoiding reputational damages in the long run.