Who Needs Malpractice Insurance & What Does It Cover?

Thang Truong
Thang Truong
Updated on:

Medical malpractice suits are becoming more common every day. While the average person may not know exactly how common malpractice is, a quick google search can tell them that medical errors are now the third leading cause of death in the United States. With statistics like this, the average patient is scared they will be a victim of medical malpractice—even if you do everything right. Medical malpractice insurance is a must. 

What is malpractice insurance?

Malpractice insurance is basically professional liability insurance for healthcare professionals. It protects you against any mistakes you make or anything you fail to do while providing care for patients. 

What does malpractice insurance cover?

Malpractice insurance covers healthcare professionals for claims filed against them by patients who feel they were harmed in some way. It covers attorney’s fees, court costs, arbitration, settlement costs, punitive and compensatory damages, and medical damages. 

Some states require physicians to have malpractice insurance, but the majority of them (32) do not. 

What isn’t covered?

Malpractice won’t cover you for:

  • Sexual misconduct
  • Criminal acts 
  • Altering medical records

Claims-made vs. occurrence coverage in malpractice insurance

Believe it or not, most patients who file a lawsuit do so years after the incident occurred. Most insurance policies are claims-made, although if you look hard enough you can find occurrence policies. What’s the difference? Claims-made policies cover you for incidents that occur and are reported while you’re insured with that insurance company. Occurrence policies cover you for any lawsuit that occurred while you were insured, regardless of when it was filed. 

It’s especially important to take note of as many physicians and other healthcare providers are covered by the group where they work. If you leave a practice and someone files a lawsuit against you three years later, you won’t be covered by the group’s insurance policy. You can get something called tail coverage, which covers you for any incidents that occur after you leave a practice. There is also something called nose coverage, which is when your new insurance company covers you for prior acts.

Who needs malpractice insurance?

All healthcare professionals need malpractice insurance. Below are our coverage for each healthcare specialist with details about malpractice insurance coverage, cost, and best providers.

SpecialtyRelevant articles 
DoctorsThe 5 Best Providers of Medical Malpractice Insurance
Physician AssistantsThe 5 Best Providers of Malpractice Insurance for Physician Assistants
Nurse Practitioners The 5 Best Malpractice Insurance Companies for Nurse Practitioners
Nursing Students The 5 Best Malpractice Insurance Companies for Nursing Students
OptometristsTop 5 Providers of Optometry Malpractice Insurance
DentistsTop 5 Providers of Dental Malpractice Insurance
Dental hygienistsThe 4 Best Malpractice Insurance Companies for Dental Hygienists
Psychologists and counselors Top 4 Providers of Malpractice Insurance for Psychologists and Counselors
Chiropractors 4 Best Choices for Cheap Chiropractic Malpractice Insurance
Physical therapists The 6 Best Malpractice Insurance Providers for Physical Therapists
Social workers Social Work Malpractice Insurance: Cost and Providers
Lawyers Top 5 Providers of Legal Malpractice Insurance & How Much It Costs

In addition to suing people, lawyers get sued for malpractice as well. If someone feels you didn’t handle their case appropriately, they can sue you. While currently only Oregon and Idaho require lawyers to have malpractice insurance, it’s a good idea to have it wherever you practice. 

Whatever your profession, malpractice insurance is professional liability insurance with a different name. 

>>MORE: Best Legal Malpractice Insurance Companies

Where is malpractice insurance required?

Most states don’t require malpractice insurance, even for doctors. The seven states that do require it are:

  • Colorado
  • Connecticut
  • Kansas
  • Massachusetts
  • New Jersey 
  • Rhode Island
  • Wisconsin

Unless you live in one of these states, it’s not required for you to carry malpractice insurance. Is it a good idea to have it? Absolutely. Thirty-four percent of physicians have been sued for malpractice, and some doctors have been sued more than once. 

If you are a nurse, you can still be sued, most commonly for medication errors or for failing to take action or making a report (such as a patient fall). 

If you’re a lawyer, the statistics are even worse: The American Bar Association says that four out of five lawyers will be sued for malpractice at some point. No matter what your profession or specialty, malpractice insurance is a good idea. 

What is Tail Malpractice Insurance? 

Tail end malpractice insurance is an essential component of insurance coverage for the professional, whether you’re a lawyer, doctor, or physical therapist. Most malpractice insurance today is claims-made insurance, which means you are only covered if the claim is made while you are carrying insurance. Should the claim be filed after you leave a practice where you were covered, or after you retire, you won’t be protected by that insurance provider any longer. 

Ensure you remain protected no matter how many years down the road the claim is filed with tail malpractice insurance. This insurance is specifically designed to provide coverage on such claims. You may end up buying tail end insurance from the same provider that originally carried your malpractice insurance. Or, you might find another insurance company that offers tail end coverage.

Are there other types of insurance I should consider?

If you have a private practice, you could look into the same types of insurance any small business owner needs. Consider:

Commercial property insurance: This protects everything in your office/practice, such as medical equipment, office furnishings, computers, etc. If the building caught fire, property insurance would cover you. Learn more at the best commercial property insurance companies

Workers Compensation insurance: If you employ anybody, most states require you to have workers compensation insurance. Workers compensation insurance covers the employee for medical care and lost wages if they become ill or are injured while on the job. If the worst case scenario happens and the worker dies, workers compensation pays a death benefit to the family. Learn more at the best workers comp insurance companies

Business interruption insurance: If your business needs to close due to an earthquake or some other catastrophic event, business insurance will cover lost income. Read your policy carefully: last year, many business owners discovered that pandemics are not usually covered. Learn more at the best business interruption insurance companies

Practice Overhead insurance: If you become disabled, practice overhead insurance provides reimbursement for the expenses of operating a practice while you can’t work. It should last until you return to work or until your share of the practice can be sold. 

What’s the difference between professional liability insurance and malpractice insurance?

Semantics. They are both the same thing. Malpractice insurance refers to doctors, lawyers and healthcare professionals and professional liability insurance is for everyone else. It covers errors you make as a professional, or things you neglect to do, which is why it’s sometimes called Errors and Omissions insurance. 

>>MORE: Professional Liability Insurance vs. Malpractice Insurance vs. E&O Insurance

How much does malpractice insurance cost?

It depends on what specialty you practice, because different specialties carry more risk. Social workers, for example, pay about $370 annually. Doctors average about $7,500 a year, but it depends. Surgeons, OB/GYNs and anesthesiologists pay the most in malpractice insurance. 

Make sure to shop around with a few companies or with a digital broker like CoverWallet so that you can compare several quotes to select the cheapest one for you.

Refer to our article on malpractice insurance for different specialties

How can I find cheap malpractice insurance?

There are a few things you can do to save yourself some money on malpractice insurance:

  1. Shop around: get quotes from at least three companies before you settle on one. 
  2. Choose a higher deductible
  3. Remember to mention professional organizations; these are usually good for a discount
  4. Consider paying in full to save some money

Top 6 Malpractice Insurance Companies

Here are our choices for the best malpractice insurance companies.

CoverWallet: Best for comparing several online quotes

If your goal is to find a malpractice insurance policy at a reasonable price, you may want to start with CoverWallet. They are a digital broker and work with several leading insurance companies. They are able to pull quotes from these companies for you to compare and select the best one for you.

The quote form is simple and fast. It shouldn’t take you more than 10 minutes to complete the application and get quotes.

After buying a policy through CoverWallet, you can manage all of your business insurance policies on its digital dashboard. The dashboard also offers useful features such as downloading the certificate of insurance, renewing a policy, or filing a claim.

CoverWallet earns a good consumer satisfaction rating (A) from BBB.

Berxi: Best Overall

Berxi offers both occurrence and claims-made policies and is number one for malpractice insurance by market share. If you get a policy with Berxi, you’ll be covered for:

  • Medical malpractice coverage
  • Defense counsel
  • Consent to settle
  • HIPAA violation defense
  • Reputation coverage

Berxi is completely digital and claims you can save up to 20% because you won’t have to work through an agent. You might find them under MedPro Group.

The Doctors Company: Best for Doctors

The Doctors Company is the largest physician-owned insurance company in the U.S. They have a great reputation and over $6 billion in assets. They offer everything you might need as a doctor looking for malpractice insurance, including legal defense through MediGuard. They offer quotes online as well, so you won’t have to leave your office to get insured. 

Proliability: Best for professional organization members

Proliability does malpractice insurance—nothing other than malpractice insurance. They have online quoting, and you can also purchase a policy online. They cover a wide variety of professions, and they have excellent reviews on Trustpilot, with a 4.8-star average based on over 11,000 reviews. Proliability also offers a number of discounts based on membership in professional organizations.  

Nurses Service Organization: Best for Nurses

If you’re a nurse, it’s hard to beat Nurses Service Organization for malpractice insurance. Coverage is available for as little as $106 a year, with coverage of up to $1 million/$6 million annual aggregate.  Their policies cover you for everything from license protection to sexual misconduct accusations. Students can get a policy for 50% off a regular policy. 

Healthcare Providers Service Organization: Best for Counselors and therapists

Healthcare Providers Service Organization covers all types of healthcare professionals, including therapists, social workers, nurses, and physical therapists. They insure over 90 health care professions specialties. You can get a quote online, and then buy a policy online as well. They offer discounts for membership in professional organizations, and students get 50% their policies. 

>>MORE: Best Malpractice Insurance Companies

Last Thoughts

No one likes to think about the possibility of being sued. Protect yourself and your practice by getting malpractice insurance (also known as professional liability insurance).

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.

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