Medical Professional Liability Insurance: Tips for Making the Right Choice

Medical professional liability insurance helps professionals in various medical fields manage the risks associated with offering advice and services to clients. It offers coverage for legal expenses and damages resulting from claims of negligence, errors, or omissions in the course of their work.

Medical professional liability insurance is a specialized type of coverage for physicians, nurses, and other healthcare professionals. It is designed to address the unique risks of working in the medical field, where even minor mistakes can have significant consequences for patient health.

Read on to learn how professional liability insurance for medical doctors works and how to choose the right coverage for your needs.

What Is Medical Malpractice Insurance?

Medical malpractice insurance is another term for medical professional liability insurance. It helps physicians protect themselves from claims that patients were harmed by their negligent actions or failures to act.

Professional medical liability insurance helps pay for the cost of defending yourself against claims of malpractice. Covered costs include lawyer fees, court fees, and expert witness fees. It also helps cover the costs of out-of-court settlements or court-awarded damages.

Beyond the medical malpractice claims themselves, the policy will typically also provide coverage for administrative proceedings brought by a regulatory or governmental agency that oversees licensing and clinical privileges.

Types of Medical Malpractice Insurance

The two main kinds of medical malpractice insurance differ significantly in both what they cover and how much they cost: claims-made vs. occurrence.

Claims-Made Malpractice Insurance

This type of insurance offers coverage if the policy is in effect both when the alleged malpractice occurred and when the patient files a lawsuit. If the policy was in effect at the time of the incident, but has lapsed by the time a lawsuit is filed, it does not offer coverage.

For example, imagine a surgeon who has a claims-made policy. They perform a procedure on Apr. 1, 2024, then retire shortly afterwards, letting their policy lapse. The patient files a medical malpractice lawsuit three years later, in April 2027. The claims-made policy does not offer coverage since it was not in effect when the claim was filed.

Occurrence Malpractice Insurance

This type of insurance offers coverage so long as the policy was in effect when the alleged malpractice occurred, even if the policy was no longer in effect at the time the lawsuit was filed. Going back to the example above, if the surgeon had an occurrence policy, they would be covered for their post-retirement claim. For that reason, occurrence policies tend to be more expensive.

Some companies give physicians the option to extend their claims-made policy through tail coverage. Tail coverage adds protection for incidents that happen while the policy was active but are reported after the policy lapses. It can be helpful for physicians who change jobs or retire.

Considerations When Choosing Medical Malpractice Liability Insurance

Medical malpractice liability insurance is crucial for physicians since it offers protection from claims of negligence causing harm. By covering legal expenses, settlement costs, and potential court-awarded damages, it helps physicians shield their practices and personal finances within policy limits.

Since every physician’s needs are different, medical malpractice insurance is not one-size-fits-all. To find a policy that suits your unique circumstances, consider the following factors when shopping for medical malpractice coverage:

1. Coverage Limits

Limits are the most the policy will pay for a covered claim. Medical malpractice limits are written as two numbers, such as $2 million/$4 million. The first number is the limit per claim, and the second number is the limit per year. Choose a limit that is appropriate for your specialty and risk tolerance.

2. Policy Type

There are two main types of medical malpractice coverage, claims-made and occurrence. Before purchasing a policy, ensure you understand which type of coverage you will have.

3. Premium Cost

A premium is the amount of money you agree to pay each month or year to keep the policy active. Consider comparing quotes from more than one carrier to understand fair pricing in your situation.

4. Claims History

AM Best, a credit rating agency, rates the claims-paying ability of insurance companies. Check their ratings to assess the financial stability of potential insurers.

5. Consent to Settle

Some policies have a consent to settle clause, which means the insurer cannot settle a claim without your agreement. Since medical malpractice payments are reported to the National Practitioner Data Bank, that helps you protect your professional reputation.

6. Prior Acts Coverage

Prior acts coverage is a policy feature that helps protect physicians from incidents that occurred before they purchased their policy. It can be helpful for physicians who are switching malpractice insurance providers.

7. Tail Provisions

Tail coverage is a policy feature that offers protection for claims that are reported after the policy lapses. It can be helpful for physicians who are entering retirement.

8. Policy Exclusions

Medical malpractice insurance does not cover all types of claims. Common exclusions include intentional acts or the inappropriate alteration of patient records. Review the fine print before choosing a policy.

Review the Specific Policy Rates in Your State

Insurance is regulated on the state level, so medical malpractice insurance coverage options can vary significantly from state to state. To make an informed decision about medical malpractice coverage, consider reviewing the damage caps, tort reform laws, and other state-specific factors that apply in your area.

State laws can affect how much physicians pay for medical malpractice insurance. That is because they affect how and when patients can file lawsuits after an alleged incident. State laws also determine the total economic and non-economic damages a patient may be awarded. Insurers consider the number of claims and the costs of claims in an area when setting rates.

When shopping for medical malpractice coverage, be aware that not all policies are available in all states. Ask the insurance provider or your broker about the availability of the policy.

Why Choose Indigo for Medical Malpractice Coverage?

Indigo leverages robust data sets and artificial intelligence in its proprietary underwriting model to quickly analyze thousands of data points, providing individualized pricing to physicians in all medical specialties. Indigo rewards physicians that practice good medicine with bigger potential savings.

Indigo’s coverage options include ‘consent to settle’ provision, ‘incident trigger’ coverage and retirement tail provisions. Coverage is available for physicians in all medical specialties. See full policy for terms and conditions.

It’s time for medical malpractice coverage that’s tailored to your needs.

Request a quote today.

Disclaimer: This article is provided for informational purposes only. This article is not intended to provide, and should not be relied on for, legal advice. Consult your legal counsel for advice with respect to any particular legal matter referenced in this article and otherwise.