Lawsuits against the medical field are something you hear about quite frequently. You hear about it from ads talking about legal compensation for failed medical implants to news stories about doctors who are sued for completing a procedure improperly. As a doctor, even if you work for a hospital, you may not be fully covered in a lawsuit. So it’s important to look into medical malpractice insurance. Below we’ll cover who should have it, how much it costs, and where you can find it.
- What is Medical Malpractice Insurance?
- When Do Doctors Need Malpractice Insurance?
- How Much Does Medical Malpractice Insurance Cost?
- The Best 5 Providers of Medical Malpractice Insurance
- Finding Medical Malpractice Insurance Through a Comparison Site
What is Medical Malpractice Insurance?
For some basics, medical malpractice insurance is defined by the Insurance Information Institute (III) as, “Medical malpractice insurance provides coverage to physicians and other medical professionals for liability arising from disputed services that result in a patient’s injury or death.” Sometimes you might see it referred to simply as professional liability insurance for medical professionals.
This type of insurance is important for doctors, as the III states that most American doctors have at least one medical malpractice suit during their careers. A survey from the American Medical Association in 2010 found that over 60 percent of doctors over the age of 55 have been sued at least once.
In fact, it’s required by law in many states for physicians to have this type of insurance.
Medical malpractice is geared towards a wide variety of medical professionals, as well. Other medical professionals who should consider this type of insurance include:
- Physical therapists
It can also cover those in the fitness industry, like yoga instructors and personal trainers. The list above is by no means exhaustive, either. Other medical professionals, like nursing students and physician assistants, should consider this type of insurance.
Medical malpractice insurance commonly covers attorneys’ fees/court costs, settlement costs, arbitration costs, medical damages and punitive and compensatory damages. It won’t cover criminal acts, sexual misconduct or tampering with medical records.
When Do Doctors Need Malpractice Insurance?
Malpractice insurance gets complicated because there are certain situations when you need to purchase it and other times when you do not. The III states that there are several different types of malpractice insurance pertaining to the way that the plans are offered:
- Group or individual policies that are purchased from a traditional private insurer
- Group or individual policies that are sourced from a medical risk retention group, which is an organization of medical professionals that provides liability insurance
- Coverage from a policy held by an employer, like a hospital
If you run your own practice or operate independently in any way, you will need to get medical malpractice insurance for both you and the medical employees that you have. You should insure both yourself as an individual and your business entity.
Medical professionals working for the government are often covered against liability claims. The federal government self-insures against liability claims. Many state and local governments also provide liability protection for their medical professionals.
If you’re a doctor and are employed by a hospital or other medical company, you should talk with your employer about how much malpractice coverage you have. Different employers may have plans that cover different fees. Gallagher Malpractice, a malpractice brokerage firm, gives the example of an employer paying damages, but sometimes the legal costs can hit the doctor. It’s important to know what your employer’s insurance covers, what it does not and the limits on the plan. You may have to source your own independent coverage if it’s not enough.
Further, medical malpractice insurance coverage from an employer often only covers you up until the moment you leave that company. If you get sued after you leave that company, you often aren’t protected. So it makes sense to get a personal malpractice plan. That way, you are covered wherever you are.
Also, some policies are occurrence-based and some are on a claims-made basis. A claims-made policy means that the policy provides coverage only if the policy is in effect when the treatment happened and when the lawsuit is filed. An occurrence policy provides coverage if the malpractice event happened while the policy was in effect, no matter when the claim was made.
Sometimes, you can purchase “tail coverage” on claims-made policies, which extends the period of time you can get coverage, like five years. You might also see convertible products, which help claims-made insureds convert to occurrence.
Medical malpractice insurance is a complicated topic. Many plans cover certain situations and not others, as we touched on above. It’s also important to know how much you are covered for, both in each occurrence and total (aggregate) limits. Plans may also have deductibles. Work with a brokerage firm or agent to make sure you understand your plan and are getting the best one for your situation.
How Much Does Medical Malpractice Insurance Cost?
The cost of a medical malpractice insurance policy can fluctuate greatly. Some of the key factors include:
- Which state you are in: Tort reform in many states has led to malpractice insurance being more affordable. Meanwhile, other states have regulations regarding policy limits, and higher limits can mean higher premiums.
- Field and specialty: More complex specialties in the medical field can mean higher risk, such as neurosurgeons or cardiovascular surgeons.
- History: Having claims and losses in the past can increase your premium.
Because medical malpractice insurance varies across the states and years based on legislation, you can find a historic rate tool by state through CunninghamGroup, a malpractice insurance broker.
For instance, rates in the state of New York in 2016 ran from $6,782 through $36,484 for internal medicine, depending on the county.
The Best 5 Providers of Medical Malpractice Insurance
Since medical malpractice insurance is so complex, you have a few options for how to go about finding it. You can go directly through a company the specializes in this type of professional liability insurance. It might also make sense to go through a brokerage firm that specializes in finding and comparing policies for you. You can also find medical malpractice insurance through major insurers that have partnerships in the malpractice industry.
- Berxi Medical Malpractice Insurance (also offered through Geico): Industry partnerships
- HSPO: Focusing on professional liability insurance for healthcare professionals
- Gallagher Malpractice Insurance: Comprehensive brokerage services
- Medpro Group: Comprehensive coverage
- Norcal Group: Length of time operating
Berxi Medical Malpractice Insurance: Best for Industry Partnerships
Geico has a page stating that it offers medical malpractice insurance. However, further down on the page it states that Geico is partnered with Berxi, a division of Berkshire Hathaway Specialty Insurance Company. Berxi is the company that offers the malpractice insurance. Getting a quote takes you to a Berxi site.
To see how the quote process works, we selected a plan for a self-employed optometrist in Wisconsin. We selected an occurrence plan. After a single, short page of questions, we got an annual premium of $368 for $1 million per claim and a $3 million aggregate limit.
HSPO: Focusing on professional liability insurance for healthcare professionals
HSPO stands for the Healthcare Providers Service Organization. This company has been providing insurance to healthcare professionals for over 30 years. It specializes in professional liability insurance for healthcare professionals. To get a quote, the site wants you to submit an application.
Gallagher Medical Malpractice Insurance: Comprehensive Brokerage Services
Gallagher is actually a medical malpractice insurance brokerage firm. That means it helps you find and compare policies but does not actually write them. Since malpractice is so complicated and rates can fluctuate so drastically, it might help to start with a brokerage firm. In order to request a quote, you must enter detailed information about your practice. The site states you can get a detailed quote within 24-48 hours.
MedPro Group: Comprehensive Coverages
MedPro Group is actually another Berkshire Hathaway company. This company has fairly comprehensive coverage, like free tail coverage and a claims defense team that handles your cases. It also offers free cyber and privacy liability. In order to get a price quote, you need to apply.
Norcal Group: Have a long history operating in this space
This company also focuses on medical professional liability insurance. It has been around for over 40 years. In order to find out more, the company wants you to call its 800 number, talk to a local broker or fill out the contact form on the website.
Finding Medical Malpractice Insurance Through a Comparison Site
To be honest, a comparison site might not be your best bet for sourcing malpractice insurance. This is a complex product that could protect you from a financially devastating malpractice suit. Digital comparison sites should only be used as a first step in trying to seeing what is out there. You should also talk to an agent or broker directly.
Just to show what the process is like, we looked for liability insurance through CoverWallet. There is a selection for medical malpractice insurance, so we selected that. We put in a doctor with $500,000 in annual revenue who runs an LLC physician office and has five employees. The system then said it could not provide an online quote and that the application has been submitted. It encourages you to call CoverWallet directly for assistance.
- Medical malpractice insurance covers you in the event that someone submits a claim for damages caused by a medical mistake. Malpractice suits are common in America, so a wide variety of healthcare professionals should consider having this type of insurance.
- Doctors should consider malpractice insurance even if they are employed, as coverage may not extend to changed employers, the coverage limits for the group may not be enough or plans can cover some costs but not others. Doctors working on their own should always have this type of insurance.
- The cost can vary drastically for this type of insurance but can run in the thousands to tens of thousands of dollars per year.
- In order to find medical malpractice insurance, consider brokers, direct companies and professional organizations.