Malpractice insurance is a type of professional liability insurance purchased by healthcare professionals. This insurance coverage protects healthcare providers against patients who file suits against them under the complaint that they were harmed by the professional’s negligence or intentionally harmful treatment decisions. Malpractice insurance also covers the death of a patient.
Key Insights
- Essential Coverage: Malpractice insurance is a type of professional liability insurance intended to cover healthcare professionals.
- Patient Lawsuits: Patients can file lawsuits against healthcare professionals seeking damages for medical negligence that resulted in further health problems or death.
- Critical Need: Studies show that medical negligence is the third leading cause of death in the United States, indicating a significant need for malpractice insurance among healthcare professionals.
- Acquisition Methods: Malpractice insurance can be obtained through private insurers, employers, or organizations such as medical risk retention groups (RRGs).
- Policy Types: The two basic types of professional liability insurance are claims-made policies or occurrence policies.
- Comprehensive Coverage: Legal costs, punitive damages, and medical damages are all covered under malpractice insurance.
Why Malpractice Insurance Is Crucial
Most medical doctors will need malpractice insurance sometime during their professional career, and for good reason. A study found that medical errors are the third leading cause of death in the United States, behind heart disease and cancer. Medical negligence can happen during diagnosis, treatment, or as part of the advice given for treatment after an illness. Approximately 250,000 deaths in the U.S. arise from medical errors every year.
According to government data, roughly 10,800 medical malpractice claims were paid in 2022. Nearly one third of physicians report they have been sued at least once in their careers. This underlines the importance of having malpractice insurance for a healthcare professional.
Medical malpractice insurance requirements vary by state. Some states specifically require insurance, while others require a minimum amount of coverage to participate in state programs designed to assist them with claims.
Malpractice insurance premiums are usually based on the physician’s specialty and geographic location, not on claims experience. This means that even if a physician has never been sued, they can end up paying extremely high premiums. The premiums can be high because of such factors as the amount of coverage needed, claims severity, claims frequency, location of practice, and laws in the area.
Varied Methods to Secure Malpractice Insurance
There are many options for procuring malpractice insurance. In the most basic form, an insurance policy can be purchased for an individual or group by a private insurer. Individual or group policies can also be purchased by a medical risk retention group (RRG). An RRG is a group of medical professionals organized to provide malpractice insurance. Another option for obtaining malpractice insurance is under the coverage plan of an employer, such as a hospital.
Individuals who work in federal health centers do not need to obtain malpractice insurance as federal law provides these workers immunity from civil lawsuits. Insurance can often also be obtained through state and local agencies if the situation deems it necessary.
The two types of policies that a healthcare professional can purchase are a claims-made policy or an occurrence policy. A claims-made policy only covers claims if the policy was in effect when the treatment occurred and when the lawsuit was made. An occurrence policy covers any claim that was made on a treatment that occurred while the policy was in effect, even if the policy has since expired.
The types of costs covered under a malpractice policy are wide. They include all legal fees, such as lawyer fees, settlement and arbitration costs, medical damages, and punitive damages.
Steps to Proving a Malpractice Lawsuit
In a medical malpractice lawsuit, the plaintiff needs to prove a medical professional violated the general standard of care of a patient, as defined by the medical community. In order to be successful in a medical malpractice lawsuit, three things generally need to happen:
- The plaintiff’s attorney must prove there was a breach of medical protocol that resulted in a practitioner choosing a different course of action than a colleague would have taken.
- The medical professional caused physical or emotional injury.
- There must be sufficient evidence proving the medical professional caused the damage.
Related Terms: professional liability insurance, claims-made policy, occurrence policy, medical negligence, risk retention group.
References
- Johns Hopkins Medicine. “Study Suggests Medical Errors Now Third Leading Cause of Death in the U.S.”
- Health Resources and Services Administration. “National Practitioner Data Bank”.
- American Medical Association. “Policy Research Perspectives: Medical Liability Claim Frequency Among U.S. Physicians”, Page 2.
- Insureon. “State Laws for Medical Malpractice Insurance”.
- Health Resources and Services Administration. “FTCA Frequently Asked Questions”.
