How Much Does Malpractice Insurance Cost?

Thang Truong

Updated on: October 20, 2020

Cost is a major factor in any insurance purchase, and that’s especially the case if you’re purchasing malpractice insurance. Malpractice insurance is a costly investment, but it’s one that’s well worth it in a world with increased litigation against health care providers and other professionals. Below we’ll cover example prices of malpractice insurance and what exactly affects those costs.

The Costs of Malpractice Insurance by Different Healthcare Professions
Why Is Malpractice Insurance So Expensive?
What is Malpractice Insurance?
How to Shop for Malpractice Insurance?
How to Save on Malpractice Insurance?

The Costs of Malpractice Insurance by Different Healthcare Professions

Below are some prices you can expect to pay in malpractice insurance annual premiums for different professions. The first three came from an American Medical Association study. It listed premiums for $1 million/ $3 million limit policies in Los Angeles, Calif. Pharmacies rates cover general and professional liability and prices are listed by CoverWallet. The dentist listing is for general estimates from Insureon for general liability premiums annually with a $1 million per occurrence limit. The therapist price is for general liability and is an estimate from Insureon.

Obstetrics/Gynecology	$49,804
General Surgery	$41,775
Internal Medicine	$8,274
Pharmacies	$1,668
Dentists	$490
Therapists	$350

Depending on the profession and the level of risk it contains, rates can run from hundreds of dollars annually all the way to tens of thousands of dollars. If you are interested in shopping for malpractice insurance for any healthcare professions, you might find the articles below useful.

Why Is Malpractice Insurance So Expensive?

The number one factor that affects malpractice insurance prices is the claim limit. These are divided by occurrence limits and aggregate (or total) limits. For instance, you might have a $1 million occurrence limit and a $3 million aggregate limit. It’s important to talk to an insurance agent about what level of coverage makes sense for your type of practice.

Another factor that affects the cost is the type of service you provide. You’ll notice above that someone who works in general surgery pays far more in malpractice insurance than someone who’s a therapist. That’s because the more high-risk the profession, the more open you are to lawsuits and the higher the damages tend to be. A surgeon could amputate a wrong arm, whereas a therapist could give poor advice.

There are also smaller considerations that can affect the price. For instance, you could save on premiums if you pay the premium upfront. Sometimes a company takes into account how long you have been in business or practicing. The state in which you practice can also affect how much you pay. Like any type of insurance, claims in your past can also raise your rates.

You might also want to look into occurrence vs. claims-made policies. Claims made only covers incidents that happened and were reported while you were insured with that company. Occurrence gives lifetimes coverage for incidents that occurred with the policy was in effect, regardless of when it was reported. Occurrence policies tend to be more expensive due to the expanded coverage.

What is Malpractice Insurance?

Malpractice insurance is a type of professional liability insurance. It covers health care professionals in case a lawsuit filed against them. Other professions usually refer to it as simply professional liability insurance. Sometimes lawyers will call it legal malpractice insurance.

Lawsuits may be filed if a patient or client feels they were harmed by professional negligence or even intentionally harmful treatment. That’s where the name “malpractice insurance” comes from.

How to Shop for Malpractice Insurance?

Malpractice insurance is commonly sold by insurance providers that cover malpractice or professional liability insurance alone. One example is CM&F, which covers malpractice insurance for a wide range of health professions, from holistic medicine practitioners to surgical health care professionals.

With so many companies out there, it’s important to shop around for the best rates. It can pay to compare between the specialist insurers and even generalist insurers like The Hartford, CNA or Mercer.

Another option is to find quotes from online brokers like CoverWallet or Insureon. Often, these sites will give you a page of side-by-side comparisons so you can find the best rates.

How to Save on Malpractice Insurance?

One of the best ways to save is to shop around and compare, which we mentioned above. Quotes should be free and come without obligation.

Some other ideas to save on malpractice insurance include:

Work with an agent to see how much coverage you need and don’t pay for too much.
See which discounts you can qualify for, such as larger practice discounts, new to practice discounts, association discounts, few claim discounts or longevity/insurer loyalty discounts.
Sometimes you can also get discounts by proving you have taken action to minimize the risk of a lawsuit, like taking risk management courses or having communication plans in place.

With how expensive malpractice insurance can get, every little bit of savings can help, from comparing rates to finding discounts.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.