Medical liability insurance, also known as medical malpractice insurance, is a type of insurance that is purchased to protect physicians or healthcare institutions from liability (financial risks) of practicing medicine.
Insurance is a complex subject and understanding the vocabulary, structure, and claim process of medical liability insurance can be highly complicated. However, having professional liability insurance to protect a physician’s assets and career is essential in today’s society.
Why Is Insurance Necessary?
Insurance is designed to help protect individuals and organizations against the risk of loss, by distributing the burden of losses over a large number of people. In basic terms, insurance serves to provide security to those who purchase it by making money available to compensate for any losses that are incurred as the result of an unpredictable or undesirable event.
Medical malpractice insurance is designed to protect physicians and other licensed healthcare professionals, such as nurses and dentists, from liability associated with wrongful practice claims that may result in:
- Bodily injury
- Medical expenses
- Mental suffering
- Damage to property
Medical professional liability insurance ultimately protects a physician from the consequences of a patient’s claim that they were injured or harmed as a result of the physicians’ negligence. It also protects against the cost of defending lawsuits related to wrongful practice claims.
Types of Medical Malpractice Insurance
There are two main types of medical professional liability insurance:
- Claims-made policy – A form of liability coverage that only covers incidents that happen and are reported within the policy’s timeframe, unless a “tail” or Extended Reporting Endorsement (ERP) is purchased (which must be purchased when the policy is terminated for prior acts to be covered).
- Occurrence-made policy – This policy has long-term, sometimes even lifetime, coverage for incidents that occur during the policy period, irrespective of when the claim is made, and even after the policy has been canceled.
In the past, medical liability insurance was entirely provided through occurrence policies, but due to the unpredictability of medical malpractice claims causing costs to rise, it triggered the development of claims-made policies.
How Are Insurance Premiums Calculated?
A variety of factors can influence the cost of medical professional liability insurance. Insurance companies aim to insure as many physicians and other licensed healthcare professionals as possible in order to spread the risk of loss. They collect appropriate premiums, which are calculated by assessing the level of risk in insuring a physician and by how much the insurer believes they will have to pay in losses. Insurance premiums are based on a range of factors, such as:
- The physician’s specialty and the services they offer
- Level of experience
- Practice patterns
- Past claims history
- Geographical location
- Types of clients they have
- Number of employees
- Policy limits
- Payment plan
Depending on their type of profession, a physician may be able to customize their professional liability policy with other types of coverage, such as general liability insurance or employment practices liability insurance.
Not all Insurance Cover is the Same
It is important to keep in mind that not all insurance is the same. What may be covered under one policy, may be excluded from another policy. For example, some policies may only cover direct patient care and not provide coverage for activities outside of direct patient care, such as community events, which may be necessary or important for some physicians. Different companies are legally structured to provide a selection of services by offering products with different benefits and costs.
Making a Claim
Understanding how insurance provides coverage and how to report a claim is essential. Promptly reporting potential claims early is key. This is so that the facts and circumstances of an event can be recorded accurately in the event of litigation. Once a claim is filed, an insurance company will have specific procedures that must be followed – these can vary between insurers.
Low Price Medical Liability Insurance for Your Business
At eQuoteMD, we provide physicians practicing in all specialties, states, and types of facilities with an exceptional professional liability insurance experience. We work with an extensive network of medical malpractice insurance companies across the country, so we can provide our clients with more options and better rates than any other professional liability insurance agency.
With over 25 years of experience, we are the trusted choice when it comes to helping physicians and other healthcare professionals get the coverage they need. We are independent from all insurance companies and advocate for you in order to find the best rates and coverage for your needs.
If you would like to learn more about us, call our main office in St. Louis, Missouri, at (855) 823-5283. Alternatively, if you are looking for the best medical professional liability insurance service resources, get a quote online today!