No one ever goes into medicine thinking they will be sued. But the unfortunate reality is that medical malpractice lawsuits happen all too often - 34% of American physicians have been sued over allegations of malpractice, according to AMA .
If you are a physician, it is important to have the right malpractice insurance in place to protect yourself in case of an unfortunate event. Whether you are just starting your medical career or you are a seasoned veteran, protecting yourself and your assets should be a top priority.
Let's explore some of the things you need to know about medical malpractice insurance for physicians. We will cover topics such as what medical malpractice insurance covers, how much coverage you need, and which companies offer the best policies.
1. Types of Medical Malpractice Insurance Available
There are two main types of medical malpractice insurance: occurrence and claims-made. Most policies available today are claims-made, but a few companies still offer occurrence policies. Claims-made policies cover you for any incidents that occur while the policy is active, regardless of when the claim is filed. Occurrence policies, on the other hand, cover you for any incidents that occurred during the policy period, even if the claim is filed after the policy has expired.
2. Know the Types of Medical Malpractice Insurance Carriers
Choosing the right medical malpractice insurance company is just as important as choosing the right policy. There are a few different types of carriers, each with their own pros and cons.
The most common types of medical malpractice insurance carriers are:
- Commercial
- Mutual
- Captive
- Trust
- Risk-retention
Commercial insurers are for-profit companies that are typically large and well-capitalized. They have the most resources to pay claims and defend against lawsuits.
Mutual insurers are owned by their policyholders. They don’t have shareholders, so they can return profits to their policyholders in the form of dividends or lower premiums.
Captive insurers are owned by a single entity, such as a hospital or group of physicians. They’re created to insure the risks of their owners.
Trust insurers are organized as non-profit entities and are typically sponsored by medical societies. They exist to provide malpractice coverage to members of the sponsoring organizations.
Risk-retention groups are similar to captives, but they’re organized under federal law and can insure the risks of members in multiple states.
3. Understand What Medical Malpractice Insurance Covers
Medical malpractice insurance for physicians covers claims or lawsuits related to your professional activities, such as errors and omissions, equipment- or treatment-related injuries, and allegations of misconduct.
What Medical malpractice insurance for physicians covers:
- Treatment-related injuries
- Monetary awards for settlements and arbitration
- Attorney fees and court costs
- Medical malpractice lawsuits
- HIPAA violations
- Billing errors
- and more
Medical malpractice insurance for physicians does not cover:
- Intentional criminal, fraudulent, or dishonest acts
- Sexual misconduct
- Forging of medical records
- Cost guarantees and price estimates
- Contractual liability
4. Compare Medical Malpractice Insurance Companies
When shopping for medical malpractice insurance, it's important to compare quotes from multiple companies. Be sure to ask about any discounts that may be available, such as for completing a risk management course or having a clean claims history.
You may also want to consider if your medical malpractice insurance carrier is assessable. This means that if the carrier has to pay out a large claim, it may assess all policyholders to help cover the costs. Some carriers are non-assessable, which means you would not have to help pay for another policyholder's claim.
Keep in mind, medical malpractice insurance carriers vary widely in their assessment policies. Weigh the likelihood of a reassessment against other advantages, such as a lower premium, before making a decision.
5. Match Your Policy to Your Practice
Depending on how you operate as a physician, you will need different coverage. For example, if you are a solo practitioner, you will need a policy that covers your individual practice. If you are employed by a hospital or group practice, your employer may already have insurance in place that would cover you in the event of malpractice.
As well, some physicians work in high-risk areas, such as surgery or emergency medicine. If this is the case, you will need to make sure your policy has high enough limits to cover any potential claims. You may also want to consider purchasing an excess malpractice insurance policy, which would provide additional coverage above and beyond your regular policy limits.
It's also important to note that some states have caps on damages that can be awarded in malpractice cases. So, if you practice in a state with such laws, you may not need insurance limits as high as you would in other states.
6. Understand Your Premiums
The premiums you pay for medical malpractice insurance are not static. They can and will change over time, based on a variety of factors.
For instance, your premiums may go up if you move to a state with higher medical malpractice rates or if you switch to a specialty that is considered higher risk. For example, anesthesiologists often experience higher insurance premiums. On the other hand, your premiums could go down if you have a good claims history or if the overall medical malpractice climate in your state improves.
Most medical malpractice insurance carriers will offer discounts for a variety of factors, such as being board-certified, practicing in certain states, or belonging to certain medical societies.
It's important to stay on top of these changes and understand how they will affect your bottom line. Work with your broker or insurer to get a clear picture of what you can expect in the coming year, and be sure to shop around to get the best rate.
7. Look for Consent-to-Settle Clauses
Consent-to-settle clauses are important because they give you the final say in whether or not a claim against you is settled. This can be critical if you are faced with a frivolous lawsuit with no merit, but your insurance company is pressuring you to settle.
Without a consent-to-settle clause, your insurance company can settle a claim against you without your consent, even if you are completely innocent. If your policy includes this clause, you must be consulted before any settlement offers are made.
If your policy does not have a consent-to-settle clause, be sure to ask for one. It will give you peace of mind knowing that you have the final say in how your case is handled.
8. Pay Attention to Defense Costs
When exploring types of medical malpractice insurance for physicians, pay attention to the policy's coverage of defense costs. These are the expenses involved in defending and processing a suit—not the amount of the award or settlement.
Defense costs include the fees of the defense attorney retained by the insurance company, the fees of expert witnesses, court reporters' fees and clerical expenses. Some policies do not pay for the costs of hiring a lawyer to defend you in court. They also might have a limit on how much the insurance company will pay for defense costs. If your policy has a cap, make sure the overall policy limit is high enough to cover your defense costs, plus any further costs for a settlement or judgment.
9. Work With Reputable Medical Malpractice Insurance Companies
Of course, the medical malpractice insurance company you choose to work with matters. You want to make sure you're working with a reputable insurance company that will be there for you when you need them most.
When looking for the right medical malpractice insurance company, keep the following in mind:
- Make sure the company is licensed to sell medical malpractice insurance in your state
- Check the company's financial stability rating
- Ask about the company's claims handling process
- Make sure the company offers risk management resources and support
- Check the company's A.M. Best rating
10. Get Multiple Quotes
When you're ready to start shopping for medical malpractice insurance, be sure to get quotes from several different companies. This will allow you to compare rates and coverage options so you can find the best policy for your needs.
When getting quotes, be sure to compare apples to apples. That is, make sure the coverage limits and deductibles are the same so you can accurately compare rates. If you have any questions about the coverage, don't hesitate to ask. The insurance company should be able to provide you with a clear and concise explanation of the policy.
Medical Malpractice Insurance for Doctors and Physicians
With medical malpractice rates on the rise, it's more important than ever to be proactive about managing your risk. Take steps to improve patient safety in your practice and talk to your insurer about ways to lower your premium. By taking these measures, you can help keep your medical malpractice insurance costs under control.
If you're in the market for medical malpractice insurance for physicians, World Insurance can help. We have more than 90 years of collective experience serving the medical and dental industries, and we understand your risks. We offer top medical malpractice insurance carriers, competitive rates, all applicable discounts, claim and premium dispute facilitation, and white-glove customer service.
Learn more about our insurance products today.
