There is not one person in the world who is immune to mistakes. Mistakes happen all the time, even with the best of us. However, the medical profession is one of the places where the consequences of mistakes can be very deadly. In the instance of mistakes, it is common for patients and their loved ones to sue the medical practitioners involved. As a medical practitioner, this is why you need malpractice insurance to help protect you from such claims.
However, getting the right medical insurance, especially in a state like California, is not as easy as it sounds. California has more than 100,000 physicians making it the state with the largest population of physicians in the country. That means there are lots of options when it comes to getting medical malpractice insurance in California.
We explain what medical malpractice insurance is and how you can get a good one for a reasonable price in the Golden State.
- 5 Best Medical Malpractice Insurance Companies in California
- Medical malpractice insurance laws in California
- The California Medical Injury Compensation Reform Act of 1976 (MICRA)
- What does medical malpractice insurance cover in California?
- How much does medical malpractice insurance cost in California?
- Claims made vs. Occurrence in California medical malpractice insurance
5 Best medical malpractice insurance companies in California
- CoverWallet: Best for comparing several quotes online
- The Doctors Company: Best for physician-owned policy
- Dentist’s Advantage: Best for Dentists
- Berxi: Best for Nurses
- MedPro Group: Best for Surgeons
CoverWallet: Best for social workers to compare quotes
CoverWallet is our best pick for social workers since these health workers are usually on a tight budget. With CoverWallet’s low-cost approach to malpractice insurance, they can easily find a policy. Plus, social workers are not bound to a single policy at a single price but can instead customize an insurance package starting at $500 per year.
CoverWallet takes a cutting-edge approach to professional liability insurance. CoverWallet is a subsidiary of Aon Corporation, a well-known insurance underwriting firm aiming to make insurance more accessible to small business owners across the country.
CoverWallet’s pricing can be pretty low, depending on your needs. Professional liability coverage packages start as low as $500 per year, though prices vary depending on the specific coverage you require.
CoverWallet, as an Aon subsidiary, shares its excellent reputation and has an A rating.
The Doctors Company: Best physician-owned company
The Doctors Company is one of the largest medical malpractice insurers in California. One of the most significant advantages is that doctors own and control it. The Doctors Company was headquartered outside Napa, California, founded in 1976. We selected this company as the best physician-owned company because of its positive reputation and breadth of services. We were also impressed with its ability to increase the practice’s profitability.
If you are considering investing in a physician-owned exchange for malpractice insurance, The Doctors Company has a stellar reputation as the best in California. It has an A rating from AM Best and $5.9 billion in assets, indicating a solid financial foundation.
The company’s policy includes the features you require to protect your medical practice from a malpractice suit and other risks like Cyberattacks. Through MediGuard, it even offers legal representation.
Dentist’s Advantage: Best for dentists
Dentist’s Advantage began in 1949 as a small family-run insurance agency. Since then, it has grown to become the premier resource for dental malpractice insurance in California. It is our top pick for the industry due to its extensive discounts and coverage customizations for dentists. Dentist’s Advantage provides professional liability coverage of up to $5 million per incident and $6 million per year in aggregate, and you can set your deductible between $0 and $10,000. The insurer provides additional business insurance policies to provide comprehensive coverage, and it offers multiple premium discounts to dentists. The Dentist’s Advantage is owned by Aon, a large insurance firm in the US with an A rating from the AM Best.
Berxi: Best for nurses
Berxi, like MedPro Group, is a subsidiary of Berkshire Hathaway Specialty Insurance. Berxi is difficult to beat in dependability, financial stability, and low premiums. We chose Berxi because of its low-cost policies, high financial ratings, and solid reputation, especially for nurses. Berxi offers nurses discounts of up to 20% when they buy directly rather than through agents.
According to the company, you can get a quote in as little as five minutes. This simplifies the process of looking for malpractice insurance.
Berxi’s nursing malpractice policies cover a variety of scenarios. This includes legal aid, general business liability insurance, and information privacy or defense in Health Insurance Portability and Accountability Act (HIPAA) investigations.
It has an AM Best rating of A++ and an S&P rating of AA+.
MedPro Group: Best for surgeons
MedPro Group is a Berkshire Hathaway company that was founded in 1899. MedPro Group is a market leader in malpractice insurance, especially for surgeons, due to its excellent track record. It has an A++ financial security rating from AM Best and an AA+ rating from Standard & Poor’s. MedPro Group instills confidence and has demonstrated its ability to pay claims. The track record of MedPro Group is perhaps its most outstanding feature. The company claims a 90 percent trial win rate; since 1899, 80 percent of all claims have been closed without a payout. MedPro Group provides flexible policies for either claims-made or occurrence coverage. You can also change your coverage to occurrence coverage if the need arises.
Medical malpractice insurance laws in California
As a physician in California, the state laws do not require you to carry malpractice insurance. Even then, as a physician, you should try to obtain it to protect yourself and your career.
Firstly, your hospital or the facility where you work in California might require you to carry malpractice insurance. Also, you might need to have malpractice insurance to participate in specific healthcare insurance plans.
While there is a $250,000 cap on non-economic damages in California, there is no cap on lost wages. This means that if a doctor is successfully sued, they could be forced to pay hundreds of thousands of dollars in damages. Add legal fees to the mix, and you’re looking at a hefty bill.
Overall, malpractice insurance can help physicians avoid a significant financial loss in a malpractice claim.
The California Medical Injury Compensation Reform Act of 1976 (MICRA)
California faced a medical malpractice insurance crisis in the early 1970s. As a result of the significant jury award and the high frequency and severity of claims at the time, insurance premiums increased by up to 300 percent. The premiums were so high that some doctors in high-risk categories like OB/GYNs and surgeons could not obtain malpractice insurance. As a result of the hike, some doctors had to retire from active practice, while others had to leave California.
California’s governor called a special parliamentary session in the face of the looming crisis. At the end of this emergency session, The Medical Injury Compensation Reform Act of 1976, or MICRA, was enacted.
The Medical Injury Compensation Reform Act limits trial awards and plaintiffs’ attorney fees in medical malpractice cases in California. For the most part, MICRA limits compensation for non-economic damages, such as emotional or mental distress, pain, or suffering, to a maximum of $250,000. MICRA’s additional requirements, as well as subsequent legislation, include the following:
- Patients must provide 90-day advance notice of their intent to file a claim, and $50,000 may be paid in periodic increments based on a sliding scale system.
- Collateral sources are permissible to potentially reduce the number of recoverable damages and avoid double recovery.
- Binding arbitration is permitted for healthcare providers.
- The statute of limitations on claims requires that any claim for economic damages/contingency fees and future damages be made within one year.
Exceptions to the statute of limitations:
- For cases involving children under the age of six, patients must file claims within three years of the occurrence of the injury or before the child’s eighth birthday, whichever is later.
- Patients must file claims within six months of the incident if the hospital is owned and operated by a county or local administrative agency.
What does medical malpractice insurance cover in California?
As a medical practitioner in California, you need malpractice insurance to cover various expenses. Medical malpractice insurance pays for any medical damages you must pay to the patient. It includes settlement costs as well as punitive damages. It may even assist in covering your legal fees, defense costs, and the cost of expert witnesses to testify on your behalf.
You might have to pay for all of those expenses on your own if you don’t have medical malpractice insurance.
However, the types of cases in which you can use malpractice insurance are limited. As such, medical malpractice insurance will not cover you in the following instances:
- Cases involving wrong-site surgery and surgical errors;
- Cases in which a patient was misdiagnosed;
- Medication errors;
- Childbirth injuries and more.
How much does medical malpractice insurance cost in California?
The cost of medical malpractice insurance in California varies depending on where you practice. An internal medicine doctor practicing in Riverside County, for example, may be required to pay a $40,000 annual malpractice premium. However, if that same plastic surgeon relocates his practice to Santa Clara County, he might get a lesser premium on his malpractice insurance for about $15,000. Another critical factor is the risk attached to your area of practice. For instance, a surgeon would pay more for a premium than a general physician. That is because surgeons handle more risks daily compared with general physicians. The following are the typical annual average rates for some medical practitioners in California.
- Internal Medicine $8,700
- General Surgeon $15,200
- OB/GYN – $14,600
Be sure to compare quotes from several providers or a digital broker before you make your final decision
Claims made vs. Occurrence in California medical malpractice insurance
In California, doctors typically have two options for medical malpractice insurance: claims-made and occurrence. As a physician, you must understand the distinctions between the two.
An occurrence policy covers any incident under the policy during the coverage’s active period. That is, if you get an occurrence policy and it expires after a year, the policy will still cover you for all claims that occur during that period. Even if the patient files a lawsuit after the policy expires, the insurance would still cover your expenses.
The claims-made policy is essentially the opposite of an occurrence policy. That means the policy will only cover claims made while the insurance policy is effective. So, if a lawsuit is filed against you after your coverage has expired, you will not have insurance to defend yourself.
The advantage of claims-made policies is that your premium is typically lower than an occurrence policy, especially in the early years of the physician’s practice, because the possibility of a claim increases gradually.