Understanding medical liability insurance isn’t as complicated as people may think. There are unique aspects of the policies that make them different from other types of insurance policies, but that doesn’t mean they are more complex.
There are really only two types of medical liability insurance policies: Occurrence and Claims Made. There is only one policy form: Liability Coverage. They all provide the basic transfer of risk like any other insurance policy.
Let’s talk about how medical liability insurance works, what it covers, and who you can trust to help you find the best medical liability insurance for you and your practice.
How Medical Liability Insurance Takes On Your Risk
Physicians, surgeons, nurses, and all other healthcare professionals face the potential risk of a medical malpractice lawsuit every time they engage with a patient. Whether they meet with a patient in person, over the phone, or on a virtual visit, providers are at risk. Managing that risk is an important part of practicing medicine.
In basic insurance terms, Risk Management is the process of:
- Eliminating risk,
- Mitigating risk, or
- Transferring risk
Physicians can eliminate certain risks simply by not performing risky procedures, such as spine surgery or bariatric surgery. Also, only performing procedures within the scope of their training and board certification eliminates a lot of risks.
Mitigating risk involves doing things that reduce the likelihood of being sued for malpractice. Having a polite and kind bedside manner, good communication, and requiring patients to sign Informed Consent statements are all examples of risk mitigation.
There are, however, some risks that cannot be eliminated or reduced, and that is where Risk Transfer is necessary. Transferring risk is purchasing a medical liability insurance policy to cover any malpractice claims that may arise. This is imperative insurance coverage to protect any healthcare provider against malpractice claims – and in many states, it is a requirement.
How Does Liability Insurance for Doctors Work?
A medical malpractice claim is a lawsuit brought by a patient (or a patient’s family member) against a doctor or other healthcare professional, a hospital, or both, claiming negligence in the care of the patient. Whether or not the charge of negligence is true is decided in a court of law; the claim itself does not make it true.
That is why a medical liability insurance policy is imperative to protect you as a medical professional. Unlike an auto insurance policy or a homeowners’ insurance policy, malpractice insurance only has one part: liability insurance.
The typical limit of liability is $1,000,000 per claim, and $3,000,000 per policy period. This limit is the most an insurance company will pay out for malpractice claims in one year, or per policy period. These limits vary depending on the state or the requirements of the hospital where the physician works or has privileges, but that is all there is to the policy.
Some medical malpractice insurance companies add on by endorsement additional coverages, such as cyber liability coverage, medical director’s coverage, or employment practices liability insurance coverage. These additional coverages are not always guaranteed, and the limits are typically low.
Types of Malpractice Insurance Policies
A medical liability insurance policy is simple, but the confusing part is that there are two types of insurance available to providers depending on the insurance company, state, or practice setting: Occurrence and Claims Made.
A Claims Made policy does what the name implies: It covers the insured for claims that arise when the claim is made. It doesn’t matter if the medical procedure or visit was months or years before.
This type of policy is helpful, since claims don’t always happen immediately after the incident. Unlike a car accident or a house fire, patients (or their family members) sometimes file a suit years after the injury occurred; and if the doctor has changed insurance companies during that time, it may be difficult to track down the previous carrier.
A Claims Made policy is less expensive than an Occurrence policy. However, when the Claims Made policy is canceled or the physician retires, an “Extended Reporting Endorsement” or “tail” must be purchased to cover any claims that may arise in the future. This can cost up to three times the annual premium, which is expensive.
An Occurrence policy covers claims based on when the incident or occurrence actually happened. For example, if a patient files a lawsuit against a doctor for an incident that happened two years ago, the doctor must file a claim with the insurance carrier he or she was insured with two years ago.
This could be problematic if the insurance carrier is no longer in business. The advantage to this type of policy is that there is no need to buy a tail, because the coverage should always be there when needed.
Most medical malpractice insurance carriers offer Claims Made policies only, but some offer both types of insurance. In some cases a physician can choose either type of policy, but some states don’t allow Occurrence policies.
How to Get Medical Liability Insurance
When choosing a malpractice insurance policy and insurance carrier, look to the medical liability insurance experts at eQuoteMD for help. Our team can find the best coverage for any specialty in any state, and we can explain what would be best for your medical field, your budget, and your medical services.
If you have any questions or would like to request a quote, call eQuoteMD today at (855) 823-5283 or fill out our request form online now. We look forward to helping you get the best malpractice insurance for you, so nothing has to distract you from taking care of your patients.