A Guide To Purchasing Medical Malpractice Insurance

Purchasing medical professional liability insurance is complicated. This guide to purchasing medical malpractice insurance can help.

Nearly everyone who works in the healthcare field recognizes the need for medical malpractice insurance. In most states, medical professional liability coverage is required by law if you practice medicine. Knowing what type of coverage you need and how to get it can be difficult, particularly since there are many companies offering coverage options that can vary widely.

What kind of policy you need will depend on several variables, and the affordability of your medical malpractice insurance will also have an impact on your choices. Unlike an auto policy, malpractice policy rates aren't determined primarily by your experience or the number of prior claims you've had. Among the criteria used to determine how much your premiums will cost may be your area of medical specialty, the state you live in, the county, and possibly the setting in which you practice (do you work in a hospital, office or clinic?).

You will also need to consider the need for medical malpractice insurance for your business if you are the owner or partial owner of a hospital, clinic, or other medical practice. Keep in mind that many claims are filed against the doctor or healthcare professional as well as against the business that employs them. Most hospitals do cover their staff through their own medical malpractice insurance, but there will be limits to the cap on the individual protection provided. Having your own policy will give you additional protection.

The Main Types Of Medical Professional Liability Coverage

There are a few types of medical professional liability insurance for you to consider, depending on your situation and work environment. Be sure to talk to a broker to determine which type is best for you.

Claims Made coverage will cover you for any incident that takes place and is reported during the policy period. This is the most common type of medical liability coverage and can be increased whenever needed. This is an important distinction for many doctors, since the cost of litigation is on the rise.

Retroactive coverage is often purchased when a doctor or other healthcare professional is buying a policy from a new provider and wants to protect himself against claims filed now or in the future that occurred when he was covered by a previous policy that is now lapsed.

Tail coverage is purchased to cover incidents that occurred while a Claims Made policy was in force, but that wasn't filed until after that policy has expired. A Tail policy is obtained from the same company that had your original Claims Made policy. In most cases, if you have Retroactive coverage, you won't need a Tail policy.

You can also get Occurrence insurance, which may pay out on a claim regardless of when the claim is filed, as long as the policy was in effect at the time of the incident. Occurrence coverage, however, bases premiums on past, present and the possibility of future claims. Determining the possibility of future claims is difficult, so this form of protection isn't offered as often.

Comparing Medical Malpractice Insurance Providers

Don't choose an insurance provider without thoroughly researching them. There are dozens of companies offering malpractice policies in the United States, but not all of them are equal or even reliable.

Your medical professional liability insurance provider should meet the following criteria:

•    The company has been in business for several years. A start-up company doesn't always have the assets or track record needed to back a large claim.
•    Reliable, available customer service representatives are available. You should be able to ask questions and get quick and in-depth responses.
•    The company should have a top rating with A.M. Best, a company that provides ratings on insurance agencies. Look for an A or A- rating if possible.
•    A company that focuses on the healthcare industry will understand the issues and concerns of medical specialists. Don't assume the same person who sells you auto or homeowner's coverage will know enough about medical malpractice insurance.

You may want to purchase your coverage through a professional broker who offers professional liability insurance from several different companies. Your broker can help you choose the policy that best suits your needs and will be able to get you the best rates possible.

Do You Understand The Limits Of Coverage?

Talk to your broker or agent about the limits of coverage on any medical malpractice insurance you're considering. You may be surprised to find that the coverage is limited to incidents that occur when you are practicing medicine at the clinic or hospital where you are employed, or the policy may have clauses that exclude coverage for specific, high risk procedures.

You should also talk to your broker about the limits of liability you should have in place for your specific area of expertise. If you're a cardiovascular surgeon, you should have a higher cap on potential pay-outs than if you are a general practitioner. Finally, find out whether your coverage takes into account legal fees if and when a malpractice claim is filed. With some policies, the cost of an attorney is deducted from the total amount available for a claim. Others may offer defense costs outside the limits of liability, leaving the full amount of coverage for any claims.

Article Tags: Medical Malpractice Insurance, Medical Professional Liability, Professional Liability Insurance, Medical Malpractice, Malpractice Insurance, Medical Professional, Professional Liability, Liability Coverage, Liability Insurance, Claims Made, Should Have

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