Medical Malpractice Insurance: 6 Things to Know Before You Buy One

There are several types of insurance policies available for physicians. Each of these offers different features to meet a specific need. However, when it comes to each specific type, navigating those features can often be overwhelming. Medical malpractice insurance is one of the most important insurance types a physician should have, so to make things simple, let’s go over the basics. Here is a list of the top things physicians should consider when purchasing a medical malpractice insurance policy.

Why Do Physicians Need Malpractice Coverage?

Photo by SHVETS production: https://www.pexels.com/photo/crop-unrecognizable-female-psychologist-and-patient-discussing-mental-problems-during-session-7176319/

Before getting into our list, it is important to understand why coverage is critical. If you look up the medical malpractice payouts by state, then you can see just how much money can be lost due to a claim. In addition to losing money, insurance coverage also helps to pay the cost of defending against malpractice claims. In addition to choosing an insurance company that is long-standing, other considerations to keep in mind are below. 

1.    State Admitted Carrier

Any company that offers medical malpractice insurance should be state-admitted. This means that their rates are on file with the state, and funds are also placed in a guaranteed holding account with the state for claims payouts. In the event a company becomes insolvent, any claims against the physician’s insurance company will be covered.

2.     Insurer Solvency

It is essential to use an insurance company that is financially stable and holds a solid rating when considering malpractice policy coverage. There is nothing worse than paying insurance premiums only to be left high and dry once a claim is actually filed.

3.     Look for Experience

Using an insurance company that has ample experience in the medical field is critical. Just as a patient would seek out specialized medical services, physicians should also seek specialized insurance coverage. Find out if the insurer offers mainly general coverage to a range of fields, or if they are focused on malpractice insurance above other areas. Working with an insurance company that spends most of its time on medical professional liability will give you a higher level of security.

4.     Understand The Limits of Liability

Photo by Alex Green: https://www.pexels.com/photo/crop-ethnic-psychologist-writing-on-clipboard-during-session-5699456/

Before buying an insurance policy, it is important that a physician research the liability limit requirements for their state, and their particular field. Just like car insurance, there are differences when it comes to coverage requirements. Also, before choosing a policy provider, check on the aggregate and single occurrence limits before making a purchase decision. Most states have a dominant limit, and employers will typically require a physician to maintain that amount as a minimum to maintain their practicing privileges. 

5.     Understanding The Cost of Defense

Not many doctors are in the business of committing healthcare fraud, but they do face the threat of malpractice claims. Before buying a policy it is important to research what types of defense costs are available in the malpractice policies being considered. There are inclusive liability limits that tend to be deducted from the total limits when used. If a policy has defense costs that are exclusive means that it won’t affect the total liability limits.

Do You Want Tail Provisions?

Tail insurance is very important for physicians, but did you know that you can get some coverage from a malpractice policy? A lot of insurance companies will offer malpractice coverage that includes free tail coverage as well. Usually, there are specific criteria that need to be met, but it can help lower costs overall. By keeping all of these things in mind, physicians will be able to make informed decisions about what level of malpractice coverage they decide to purchase, and from whom.