Medical Malpractice Insurance
A specialized type of professional liability insurance, medical malpractice insurance provides coverage to physicians and other medical professionals for liability arising from disputed services that result in a patient’s injury or death.
What is Medical Malpractice Insurance?
Medical malpractice insurance also known as medical professional liability insurance covers doctors and other professionals in the medical field for liability claims arising from their treatment of patients. It is required in almost all states and most medical systems as a requirement to practice.
The optimal type and amount of insurance you need to meet your state’s malpractice insurance minimum requirements and for adequate personal and practice asset protection may vary greatly based on your individual circumstances
Medical professionals should seek insurance coverage for themselves as individuals, as well as for their business entity—e.g., corporation, partnership, limited liability company—and their employees
What's Covered & Not in Medical Malpractice Insurance
Medical malpractice insurance covers a range of expenses associated with defending and settling malpractice suits; it also pays damages if you’re found liable. Covered costs include:
- Attorneys’ fees and court costs.
- Arbitration costs.
- Settlement costs.
- Punitive and compensatory damages.
- Medical damages.
A medical professional liability insurance policy covers bodily injury or property damage as well as liability for personal injury such as mental anguish. The complexity involved in discovering negligence results in a higher percentage of premium dollars going toward defense and cost containment expenses. .
Medical malpractice DOES NOT cover liability that arises from sexual misconduct, criminal acts, and inappropriate alteration of medical records
Types of Medical Malpractice Coverage
By far the most common type of coverage are Occurrence and Claim made .
Occurrence. This type of malpractice insurance provides coverage for any incident that occurs during the policy's term, regardless of when a claim is made. Occurrence policies are "long-tail" policies, which ensure coverage for the life of the patient and the physician. In other words, the
policy's coverage remains in force even if the provider changes jobs or the company shuts down.
Claims Made. This insurance policy type provides coverage for claims that both occur and are reported to the insurer while the policy is in force. Thus, incidents that occur occurring during a policy period but which are reported after its expiration or discontinuation can expose a provider and facility to potentially significant damages, unless someone has also purchased "tail" coverage. Claims-made policies must be renewed annually; when the contract period ends, coverage can be continued by purchasing "tail" coverage.
These types of malpractice policies differ, as well, in their distribution of aggregate amounts set aside for claims settlements. For instance, on a claims-made form, the aggregate amount covers the term of the policy. But with occurrence policies, the full aggregate amount is made available each year, and the aggregate is not diminished over time.