You’re probably well aware of the havoc that medical malpractice claims can cause as a healthcare professional, a medical practice owner, or the owner of a medical staffing company. If you’re thinking about getting a malpractice insurance policy or aren’t sure why your state requires it, you’re probably wondering, “What does a malpractice insurance policy cover?”
In summary, medical malpractice coverage protects you against accusations of professional incompetence or incapacity to deliver adequate care, which results in physical, mental, or other economic losses. Continue reading to discover more about the types of claims that a medical malpractice policy will protect you from and the financial coverage that an insurance company will provide.
What Is the Definition of Medical Malpractice Insurance?
Medical malpractice insurance is a type of business insurance that is specifically designed for health care practitioners. It is also known as “medical professional errors and omissions insurance.” Medical malpractice insurance covers claims for services that result in a patient’s damage or death.
What Is the Importance of Medical Malpractice Insurance?
For anyone working in the medical field, medical malpractice insurance is frequently required by state law. Government contracts or corporate clients may also require it.
Medical malpractice coverage protects healthcare practitioners, therapists, counselors, and medical facilities against professional negligence claims such as:
- Inability to give high-quality care
- Causing a patient pain, suffering, or mental discomfort
- Economic losses as a result of a patient’s lost salary or healthcare costs
Malpractice coverage is a crucial component of risk management even when it is not required. Even the most experienced healthcare providers can make a mistake or be sued for providing subpar care, which includes misdiagnoses, surgical errors, and prescription errors.
Malpractice insurance is also known as professional liability insurance or errors and omissions insurance in other industries.
Policies Based on Claims Versus Policies Based on Occurrence
Medical malpractice insurance can be divided into two categories:
- Claims-made: A claim must occur and be submitted to your insurance company while your policy is in existence. Claims-made policies are the most common type of medical malpractice insurance. If you want coverage for a claim made after your policy is no longer in effect, you’ll need to pay extra for “tail coverage.” Tail coverage extends your policy for a specific period of time, such as five years after your policy ends. While this option can be costly (up to three times the amount of your annual premium), it can help cover you for any later claims. If you are changing policies, starting a new job, or retiring, it may be a smart alternative.
- Occurrence-made: This covers claims made within the policy period, regardless of when they were made, even if your policy was canceled. While occurrence-made plans are less common, certain insurance providers do offer them. In general, they are more expensive than claims-made insurance.
What Does Medical Malpractice Insurance Cover?
Professional medical malpractice insurance policies cover the following claims:
- Injuries caused by medical care
- Treatment mistakes
- Medication mistakes
- A clinic’s premature discharge
- Unneeded surgery
It covers the costs of defending and settling lawsuits, such as:
- Arbitration costs
- Lawyer’s fees
- The cost of going to court
- Medical expenses
- Damages for both punitive and compensating purposes
Your medical malpractice policy will cover you up to the limits of your policy. So, your policy’s limitations may be expressed as two amounts, like as $1 million/$3 million. Here’s what those figures imply:
- Your insurance company’s maximum payout per claim is $1 million.
- The highest amount your insurance provider will pay every policy period is $3 million.
What are Medical Malpractice Insurance Exclusions?
Here are some examples of popular professional liability insurance policy exclusions:
- Changing medical records
- Accidents in automobiles
- Acts of criminality
- A data breach is an example of cyber liability.
- ruined commercial property
- Injuries to employees
- Patient discrimination or mistreatment claims
- Lawsuits that you file
- Patient mishaps
- Sexual impropriety
Who Is Covered by Medical Malpractice Insurance?
Medical practitioners such as doctors, home health care providers, nurses, and physical therapists may be required to have medical malpractice insurance by the following entities:
- Business clients
- Authorities in charge of granting credentials
- Government contracts.
- Healthcare delivery systems (such as clinics and hospitals)
- Health insurance plans
- Licensing authorities
- State laws
Even if you are not required to obtain medical malpractice insurance, it is worthwhile to examine if your company does any of the following:
- Provides care to patients
- Provides care to residents of health care facilities
- Monitors the care of patients
- Rents, sells or maintains medical equipment
Here are several occupations that could benefit from medical malpractice insurance:
- Practical nurses who are licensed
- Licensed practical nurses
- Students of nursing
- Personal fitness trainers
- Therapists of physical therapy
- Medical assistants
- Yoga teachers
What is the Cost of Medical Malpractice Insurance?
According to Trusted Choice, a network of independent insurance agents, nurses in some states might pay less than $100 per year for medical malpractice insurance. However, professions with higher risk might expect to be paid more. Surgeons can expect to earn between $30,000 and $50,000 per year.
According to Insureon, the median annual cost of medical malpractice insurance for counselors and therapists is $500 per year, while the median annual cost for dieticians and nutritionists is $365 per year. The average annual cost of home health aides is $110.
Your medical malpractice insurance costs will be determined by various factors, including:
- Your line of work
- Years of expertise
- How frequently do you work?
- Previous lawsuits brought against you (if any)
- Your current location
- Your policy’s restrictions
Types of Malpractice Insurance
There are numerous methods for obtaining malpractice insurance. A private insurer can purchase an insurance policy for an individual or a group in its most basic form. A medical risk retention group (RRG) can also purchase individual or group coverage. An RRG is a group of medical practitioners that have banded together to offer malpractice insurance. Another alternative for obtaining malpractice insurance is through an employer’s coverage plan, such as a hospital.
Individuals who work in federal health centers are not required to seek malpractice insurance since federal law protects them from civil lawsuits. If the case calls for it, insurance can typically be purchased through state and local authorities.
A healthcare professional can obtain one of two types of policies: a claims-made policy or an occurrence policy. A claims-made policy only covers claims if the policy was in existence at the time of the treatment and the lawsuit. A claim made on a treatment that occurred while the policy was in existence is covered by an occurrence policy, even if the policy has since expired.
A malpractice policy will cover a wide range of expenditures. They cover all legal bills, including attorney fees, settlement and arbitration costs, medical damages, and punitive damages.
Proving a Medical Malpractice Lawsuit
In a medical malpractice action, the plaintiff must demonstrate that a medical professional breached a patient’s general standard of care, as determined by the medical community. Three factors must normally occur in order for a medical malpractice case to be successful:
- The plaintiff’s counsel must demonstrate that there was a violation of medical protocol that caused a practitioner to choose a different course of action than a colleague would have.
- The medical professional inflicts bodily or emotional harm.
- There must be substantial evidence that the medical professional was responsible for the damage.
What Is the Difference Between Medical Malpractice and Professional Liability Insurance?
Medical malpractice insurance, often known as errors and omissions insurance, is a type of professional liability insurance. While both names are often used interchangeably, there is a significant difference.
Medical malpractice insurance protects your legal costs, including verdicts and settlements for allegations that you caused a patient’s death or damage.
Professional liability insurance covers mistakes made in your commercial activity.
For example, if a patient alleges that your treatment caused pain or necessitated more medical care, this would be covered by your medical malpractice insurance. However, if a patient accused you of violating their privacy under the Health Insurance Portability and Accountability Act (HIPAA), professional liability insurance would most certainly cover you.
What Is the Difference Between Medical Malpractice and General Liability Insurance?
General liability insurance covers injuries and property damage caused by you inadvertently to others.
Here’s an example to help you distinguish between the two.
Assume you’re a chiropractor with your own practice. If a patient slips and falls at your office due to a damp floor, their medical expenditures are covered by your general liability insurance.
However, if a patient alleges that your chiropractic treatment caused them to become injured, your medical malpractice insurance will cover the cost of your legal defense, including any verdicts or settlements.
How to Find the Most Cheap Medical Malpractice Insurance
Check with your company to see whether they already provide medical malpractice insurance.
Before you start looking for a policy, check to determine if your employer provides medical malpractice insurance to its employees. Alternatively, your employer may provide discounted group insurance.
Even if your employer provides medical malpractice insurance, you should consider purchasing your own policy. Here are some instances of claims that your employer’s insurance policy might not cover:
- Claims made against you as a result of your past employment
- Employee claims against another employee
- Wages lost while attending claims-related judicial hearings
- Determine how much coverage you require.
Policies for medical malpractice insurance can range from $100,000 per occurrence and $300,000 per year to $1 million per occurrence and $3 million per year. It’s a good idea to consult with an insurance professional who can help you match the quantity of coverage to the degree of danger that your job confronts. A surgeon, for example, is more likely to face a costly lawsuit than a dietitian.
Some states limit the amount of compensation that can be given. In California, for example, a medical malpractice case is limited to $350,000 if there is no wrongful death. You may not need to purchase a policy with limits that surpass the cap if your state has one.
Compare Prices for Medical Malpractice Insurance
Get numerous estimates from different insurance companies to find the best deal.
If you already have a business owners policy, obtain a price for the cost of adding medical malpractice insurance to your existing policy. Bundling coverage types with the same company is frequently less expensive than purchasing separate plans from various carriers.
Do Your Clients Expect You to Be Covered by Medical Malpractice Insurance?
Even if state law does not mandate it, healthcare networks typically require doctors, nurses, and other professionals to carry medical liability insurance.
Some medical systems offer this coverage to their employees. Others self-insure themselves and their employees by establishing a liabilities trust fund to cover the costs of legal defense and settlement of malpractice claims. Healthcare professionals, on the other hand, may need to purchase their own coverage.
It’s critical to ensure that you meet your state’s minimal malpractice insurance requirements while also considering the risks of your particular practice.
What Safeguards Do Healthcare Providers Have Under Medical Malpractice Insurance?
Even the most knowledgeable and diligent specialists might make a mistake and end up with a costly and frivolous lawsuit. Medical malpractice insurance covers the costs of litigation, such as attorney fees, as well as punitive and compensating medical harm claims.
Even if your company or the facility where you operate has liability protections in place, it may be important getting your own malpractice insurance to ensure you’re fully insured.
What Additional Medical Malpractice Insurance Coverage Choices Are There?
When purchasing a malpractice policy, you may choose the amount of coverage and other criteria to match your company’s needs and budget. This includes the following:
Tail Coverage Endorsements
Because most malpractice plans are based on claims, you may want to consider adding tail coverage for added protection. Tail coverage, sometimes known as an extended reporting period (ERP), permits you to submit a medical malpractice claim after your policy has expired. However, the claim-related occurrence must have occurred while the policy was in effect.
Policy exclusions, deductibles, and policy limits
Limits, deductibles, and exclusions vary by policy and may affect your premium.
Policy limits are the maximum sums your insurer will pay on a claim, both per claim and for all claims filed during the policy period (usually one year). Minimum coverage requirements for both types of restrictions may exist in your state.
The deductible is the amount of money you must pay before your insurance company will cover a claim. A high deductible will reduce your premium, but make sure it is an amount you can comfortably pay.
Finally, understand any exclusions in a malpractice policy. It does not cover criminal behaviors such as sexual misbehavior, but it will protect you if you are wrongfully accused.
You now know the answer to the question, “What is malpractice insurance?”” and understand where to obtain malpractice insurance, making a decision and incorporating malpractice professional liability coverage should be simple and painless.”
When compared to the time, energy, and money you’ll save with medical malpractice insurance, the chance of losing your personal assets, dealing with a big financial burden and economic damages, and hurting your reputation isn’t worth it as a medical professional.
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