What is Medical Malpractice Insurance?Medical malpractice insurance refers to a type of liability insurance that covers medical providers to protect them from wrongful practices. All states require physicians to carry medical malpractice insurance. Most hospitals and clinics also insist that doctors and medical professionals have malpractice insurance to practice.
What Are the Different Types of Medical Malpractice Insurance Policies?There are two primary type of medical malpractice insurance policies:
- Claims-Made-These kinds of policies are the most common. They cover events that happened during the policy period—if the claim is reported while the policy is still in effect. So, they only pay for lawsuits brought while the policy is in effect.
- Occurrence-Made - These types of policies provide the broadest coverage. They cover events that occur during the policy period regardless of how much time passes before the insurance company is notified of the claim. So, for example, if a doctor has a malpractice policy that was in effect on January 1st, 2016 to December 31st, 2016, any event that occurred during that time is covered regardless of when the claim is filed—even if the physician is no longer practicing.
Insurance Policy Coverage LimitsMost of the time, the insurance company pays for malpractice settlements. Therefore, it is essential to understand how the insurance policy coverage limits will affect a malpractice case.
There are two types of coverage limits:
- Per-occurrence coverage limit - This is the total amount that an insurance company will pay for a single claim. So, if a doctor carries a malpractice insurance policy with a $1 million limit, then the most the insurance policy would pay on any one claim is $1 million—even if the jury awards a higher judgment.
- Aggregate limit - This is the total amount the insurance company will pay for a period. So, if the insurance aggregate limit is $5 million for one year, then the insurance company will pay up to $5 million in claims in a year.
Things to Keep in MindHere are some more factors to keep in mind when it comes to malpractice insurance:
- The insurance company decides whether to accept offers - While the doctor might have to agree to a settlement, usually the insurance company determines whether or not to take an offer.
- There are exclusions - Certain acts, such as sexual misconduct or illegal acts, might not be covered by a malpractice insurance policy. Also, if a doctor lies on their policy application, then it could void the policy.