Patients and their treating doctors may potentially suffer from financial consequences as a result of errors and poor results. When the worst-case scenario occurs, patients and their families often sue. Irrespective of how remote the possibility of being sued is for medical practitioners, they need medical malpractice insurance.
This article will educate physicians on all aspects of medical malpractice insurance, and how to ensure that you’re sufficiently covered with your plan.
Importance Of Malpractice Insurance
All medical practitioners should be covered by professional liability, commonly referred to as malpractice insurance, for the entire period they’re practicing. This type of insurance protects your exposure to your professional responsibility, including malpractice claims. Liability insurance is critical for financial security since a malpractice claim may be filed against you at any time after a patient has been visited.
The primary purpose of a medical malpractice insurance is to shift a substantial part of a physician’s malpractice risk to an insurance company. This is accomplished through the insurance policy. It’s a contract that details both the carrier’s duties and the areas in which it’s not obligated.
Types of Malpractice Insurance Policy
Malpractice insurance is available in two primary forms: incidental coverage and claims-made coverage. While most policies offered in today’s insurance market are claims-made, a few firms do provide occurrence plans.
- Occurrence Plan
Occurrence coverage offers lifetime coverage for events that happen within the policy’s effective period, regardless of when a claim is made. For instance, if you had occurrence insurance in 2018 (which you cancelled in 2019) and are sued for malpractice in 2020 for an event in 2018, you’d be covered.
Premiums are initially more costly than premiums for claims-made policies. But, if you’re able to maintain your insurance, the overall costs should equalize with time. Occurrence plans are uncommon since insurers have trouble predicting the cost of claims that occur long after the policy has expired.
- Claims-Made Plan
Claims-made insurance covers events that occur only while the policy is in effect. Coverage ends when the policy is cancelled. If you want to continue receiving coverage after the policy has expired, tail coverage must be bought. For instance, if you had claims-made insurance in 2018 (which you cancelled in 2019) and are sued in 2020 for an event in 2018, you won’t be receiving any protection.
This insurance covers events and claims that occur within the policy’s validity term. You must maintain compliance with your policy/policies to avoid coverage gaps. Generally, this type of insurance is cheaper initially, but progressively becomes pricier over time. Suppose an event occurs within the policy term, but the claim is submitted after the policy has ended. In that case, the insurance company will deny coverage.
Get The Sufficient Coverage Level
Certain circumstances may require policyholders to get coverage of over USD$1 million or USD$3 million, such as:
- You have a large number of high-income patients. A lawsuit filed by one of them may result in substantial economic damages due to the revenue lost from their hefty salaries and bonuses.
- You reside in a region that’s well-known for its accolades. A larger insurance maximum may be necessary in counties where juries regularly award more than USD$1 million.
- You’re the owner of high-value assets. If you own a surgical center or commercial real estate, you risk being sued for more than USD$1 million or USD$3 million in damages.
- You have a high-risk profession. Neurosurgeons, bariatric surgeons, spinal surgeons, obstetricians, and gynecologists may all suffer significant economic losses. It’s because their patients may need costly healthcare services for an extended period.
The level of coverage you need is determined by the volume and kinds of cases handled, as well as the potential amount of damages and defense expenses if a lawsuit arises. Consider the type and amount of your company and personal assets since these may become susceptible to collection under a judgment if you’re found responsible for malpractice. Another factor to consider when calculating your practical limit is if you want a per-claim limit for numerous claims within a particular insurance period.
Take note that contract terms vary per carrier and are essential in determining which insurance to purchase. It’s not smart to choose the carrier with the lowest premium. Reduced rates often come with less coverage, while more coverage increases the cost. As a result, it’s critical to read and comprehend the contract before signing fully.
Lastly, remember that almost all malpractice plans deplete, which means your defense charges and expenses are paid out of the claim limit. If you have a very low limit (for example, USD$100,000), then you may not even be able to defend your case through the trial.
Understanding your policy and coverage of malpractice insurance may be difficult, yet it’s essential. Do your research and examine the concerns mentioned in this article while buying new insurance or renewing existing coverage. Doing so will assist you in finding out whether insurance is worth signing or if its protection is sufficient for the coverage level you require.