Medical Malpractice Insurance – Everything You Need To Know As A Physician

For those working in the healthcare industry protecting yourself is essential. Malpractice insurance for doctors is an extra but essential expense that most physicians dread. Medical malpractice insurance helps to protect physicians, nurses, radiologists, and other physicians in the event a malpractice claim is filed. This coverage helps to pay for defense against the claim, investigate the facts surrounding the incident, and in some cases pay for out-of-court settlements. Let's take a more thorough look at malpractice tail coverage and malpractice insurance so that you can make an informed coverage decision.

Key Points:

• Medical malpractice insurance helps to protect physicians and healthcare facilities in the event of a claim. 
• Any healthcare provider who works directly or indirectly with patients should consider coverage.
• Managing risk in the medical field is the best way to reduce the chance of a claim being filed.
• More than one type of medical malpractice insurance may be needed depending on the facility and physician's specialty. 

Understanding Medical Malpractice

Medical mistakes are responsible for the untimely death of at least 250,000 people annually. In the United States alone, medical malpractice has been listed as one of the top five leading causes of death. Malpractice can occur in many forms ranging from misdiagnosis to negligence in the operating room that leads to death. Though no physician sets out to harm their patient, sometimes mistakes happen. Malpractice insurance for doctors helps to mitigate the cost associated with litigation due to medical malpractice claims. 

Definition of Medical Malpractice

By definition, medical malpractice is considered any omission or act that is performed by a medical professional or doctor. The acts or omissions need to have occurred during the treatment of the patient, and the acts or omissions must be outside of the normal range of practice. This is specifically referred to as medical negligence. When negligence results in injury, harm, or death, it is considered medical malpractice. Medical negligence may occur during the treatment, diagnosis, care, or aftercare of a patient. It may also occur more than once or during several steps of the medical process. Medical malpractice law is a form of tort law that further falls under the banner of personal injury lawsuits. 

Common types of Medical Malpractice

There are thousands of medical mistakes made each year. The majority of these mistakes are preventable, and a significant number of them do not result in injury. That being said, physicians look for the best medical malpractice insurance because mistakes can lead to injury which frequently results in a malpractice lawsuit. Some of the most common types of medical malpractice include:

• Errors with medication – Physicians may prescribe the wrong dosage or type of medication for a patient’s ailment. A nurse may also administer an incorrect medication or dosage that leads to injury or worse. Errors additionally include prescribed medications that cause harm when consumed.
• Lack of treatment – Doctors who have properly diagnosed a patient but fail to follow medical norms to treat their condition may be negligent. A failure to follow up or care for the patient that results in injury or a worsening of the condition equally qualifies. If a physician fails to treat a patient after a diagnosis, it is also negligence.
• Mistakes during surgery – Surgical mistakes such as leaving sponges or tools inside of the body following surgery are common errors. Performing an operation on the wrong side of the body and performing surgery on the wrong patient are also frequent forms of malpractice. These are especially difficult for patients who use a medical loan to pay for treatment. 
• Injuries during birth – Birth-related claims are among the most standard form of malpractice suits. Nerve damage, spinal cord injuries, shoulder dystocia, cerebral palsy, and more are some of the top birth-related mistakes made in the medical field.
• Improper diagnosis – The failure to properly or correctly diagnose a patient is the top mistake made in the medical field. Cancer and heart attacks are the most often misdiagnosed ailments that can lead to critical injuries or even death.  

How Does Medical Malpractice Insurance Work

Any business that offers healthcare-related services will need to have some form of medical malpractice insurance. A few different medical malpractice insurance types cover a business as a whole and physicians or healthcare workers as individuals. Malpractice tail coverage is also included under this insurance type. This form of business insurance works by covering the facility and/or the healthcare provider in the event that a patient files a claim of negligence.

Medical malpractice coverage as business insurance will cover the physician or facility, even one purchased with a medical practice loan. When a claim is filed, it will cover the legal cost of defending against the claim as well as any judgment or settlement that results from the patient's claim. Businesses that take out medical practice loans are often required to maintain malpractice insurance as a form of asset protection. Instead of the hospital or healthcare professional paying for defense out of their own pocket, it is covered by insurance.

For example, a practicing physician may see a patient in their clinic that is exhibiting signs of a heart attack, however, the physician fails to treat the illness despite making a diagnosis. The patient then goes into cardiac arrest and falls into a coma, which could have been prevented with basic care. In this instance the patient’s family or the patient, if they recover, can file a malpractice claim due to failure to treat. If malpractice insurance for doctors is held by the physician, the policy will cover the cost of defending against the claim, or the payout due for settling with the family/patient due to the negligence claim. 

What Does Medical Malpractice Insurance Cover?

Medical malpractice insurance types and malpractice insurance costs may differ depending on the insurance company providing coverage and the entity being covered. However, medical malpractice insurance in general covers a specific range of issues. A policy will cover general expenses that are incurred in the defense and settlement of a malpractice suit. In the event that a physician, nurse, healthcare worker, or business is found liable, it will also cover the cost of damages up to a certain point. Other covered expenses include:

• Compensatory and punitive damages
• Arbitration expenses
• Court cost
• Lawyer fees
• Medical damages

It is worth noting that malpractice insurance won’t cover illegal activities, sexual misconduct, or unauthorized medical record alterations.

Who Needs to Pay Medical Malpractice Insurance?

Medical malpractice insurance companies offer coverage for a variety of professionals. Malpractice insurance for doctors that work in clinics and hospitals is the most common. Any healthcare professional that interacts directly or indirectly with patients should also have medical malpractice insurance. Healthcare workers who offer care in private clinics, private practices, or who offer care in residential healthcare facilities also can benefit from malpractice coverage. It is also common to see medical malpractice insurance for nurses who are in charge of monitoring patients in both private practices and larger hospitals.

Why Medical Malpractice Insurance is Necessary for a Medical Practice

Professional liability insurance or medical malpractice insurance is essential for physicians and private medical practices alike. There are seven states in which every private practice and physician is required to hold valid insurance if they plan to offer medical services to patients. For medical practices and healthcare professionals working within them, medical malpractice insurance can help pay for the cost of defense. Coverage will also help cover the cost of damage in the event a claim is successful.

Legally, private practices must carry some form of medical malpractice insurance. This is mainly due to the sheer number of people who will be interacting with patients. In the event that a patient is accidentally harmed, malpractice coverage will protect the business as a whole and the individual either partially or in full. That being said, certain members of staff may need to hold their own coverage in addition to the blanket coverage held by the practice. Further, it is important to review medical malpractice insurance requirements by state to ascertain if coverage types are required for private practice.  

How Much Does a Medical Malpractice Insurance Cost?

In general, a typical physician will spend close to $8,000 per year on medical malpractice insurance coverage. Of course, the cost of coverage depends on medical malpractice insurance types and also the amount of coverage needed. The actual location of the provider or business will also play a part in the cost of coverage. The amount, liability limits, and past claims activity may also cause the rates to increase or decrease. OB/GYNs, urologists, otolaryngologists, and surgeons tend to have the highest rates due to how frequently claims are filed against them. The premiums for these specialties can range anywhere from $30k to $50k per year.

Medical Malpractice Insurance vs Professional Liability Insurance

Medical malpractice insurance and professional liability insurance are both important forms of coverage. However, they do differ greatly in fundamentally important ways.

Medical Malpractice Insurance

A medical malpractice insurance policy will help pay for the cost of building a defense, attorney’s fees, settlements, and judgments. Specifically, these charges must arise from a claim that relates to patient injury or death.

Professional Liability Insurance for Medical Professionals

Professional liability insurance is also called errors and omissions insurance. This form of insurance covers any mistakes made during regular business activities, but it doesn't cover losses from medical equipment financing mistakes. For example, if a patient claimed that their HIPPA rights were violated, this policy would be used to defend against the claim.

Medical Malpractice Insurance vs General Liability Insurance

Medical malpractice insurance and general liability insurance both help protect business owners from financial harm, but there are differences. 

Medical Malpractice Insurance

Medical malpractice insurance covers harm caused by medical neglect by a healthcare professional. For example, if a patient visits a dentist for tooth extraction, but the wrong tooth is removed, malpractice insurance will cover the claim. 

General Liability Insurance for Medical Professionals

General liability insurance policies cover accidental damage to property and physical injuries inflicted on others. For example, if a patient falls in the restroom of a clinic due to a wet floor, a general liability policy will cover the claim. 

How to Choose the Right Medical Malpractice Insurance Coverage?

When it comes to malpractice insurance, there are two main types to consider. Either claims-made insurance or occurrence insurance. The most common form is claims-maid, however, choose a policy type that best fits your practice model. Choosing the right insurance carrier for your business is also important. Practices that are for-profit and have plenty of income should opt for a commercial provider.

Captive insurance companies are often owned by a single owner, such as a hospital. This can make the coverage easier to manage. There are other types to choose from as well. Practices or healthcare facilities that cover multiple specialties will need to find a company that offers a broader range of coverage. You can even find a company that offers startup business insurance and malpractice insurance.  Before settling on a provider, think about the location, growth potential of the practice, and the specialties housed within the business.

Where to Get Medical Malpractice Insurance for Your Practice

These are only a few of the medical malpractice insurance companies on the market. Searching for medical malpractice insurance requirements by state is the best way to find a provider that meets your needs and your budget. 

• Proliability Insurance is a great all-rounder company that offers coverage up to 5 million. It offers coverage for a range of healthcare providers and practice types.
• Dentist advantage offers coverage up to 6 million and is available in all states. Certain coverage types cost extra, but this company is the best option for dentists.
• NSO is an ideal company for nurses looking for medical malpractice coverage. They are available in every state and offer limits of up to 6 million. This company only provides coverage for nurses.
• SVMIC is among the top choices for practicing physicians. They offer coverage limits of up to 12 million, however, they are only available in a limited number of states in the southeast.
• HPSO offers policies all over the country for a variety of providers. It is a great choice for therapists, and the coverage can travel with the provider. The limits go up to 3 million.

How to File a Medical Malpractice Insurance Claim

Filing a malpractice claim is not easy. The rules for filing vary between states and also between private practices and larger hospitals. Start by speaking with a skilled lawyer who has ample experience in medical malpractice law. Check the statute of limitations to ensure that the deadline for filing has not passed. For some, the clock starts when the injury is discovered, for others it starts at the actual time of the injury.

The lawyer will then proceed with the pre-lawsuit requirements such as going through the review boards, filing a notice of intent, and getting expert opinions on the injury. A notice will be given to medical malpractice insurance companies prior to proceeding to court. This will give the insurance company a chance to research the claim and even settle outside of court if they prefer. It is important to comply with any pre-suit requirements to avoid claim denial. The most common reasons a claim is denied is due to a lack of provable causation, the statute of limitations has passed, and the patient actually remedied the problem despite negligence having occurred. 

Tips for managing Medical Malpractice risks in a Medical Practice

Malpractice claims are common, but they don’t have to be a regular part of a practice's business model. Reducing the risks by ensuring satisfied, happy clients is the best way to cut down on claims. Always make a point of communicating well with patients during their actual visit, and over the phone, if they call. Create a safe and healthy work culture which in turn will support patient safety. Keeping strict records of treatment, visits, diagnoses, and care is another way to cut down on malpractice claims.

There should always be firm policies and procedures that are followed that will help reduce the risk of mistakes and mishaps. Data privacy is also critically important. This applies to both physicians and their supplemental staff. Make a habit of documenting each visit with the patient in real time. Note their concerns and your suggestions, as well as any courses of treatment suggested. If in doubt, don’t hesitate to pull in an expert or a fresh set of eyes for a second opinion. Following the differential diagnosis process is also a strong method of avoiding malpractice claims. 

Final Word

Overall, malpractice insurance costs will end up being less than paying for a defense in the event of a lawsuit. Even when a private practice is not at fault the harm to its reputation can cause financial harm. Researching a claim, defending it in court, or settling it out of court is also a costly endeavor. For most private practices and private physicians, the cost of mounting a defense can be enough to sink a practice. The best medical malpractice insurance will help private practices to continue operating while a claim is being investigated and processed.

Doctors, occupational therapists, physical therapists, and their allied staff are typically the types of professionals that need malpractice insurance. Checking out medical malpractice insurance quotes in your area will help ensure that your business has the right type and amount of coverage when you need it the most. It is also important to help reduce the risk of having a malpractice claim filed, to begin with by managing risk efficiently.