Why Malpractice Insurance Is Critical For Your Medical Business
When you earned your medical degree, you swore an oath to “first do no harm” to your patients. However, even if you've taken that promise seriously, mistakes happen.
When medical mistakes occur, there's a chance your patient could decide to sue you. That’s why all doctors need to pay for malpractice insurance.
This type of insurance will protect you if a patient claims that they were injured during the course of medical treatment. Medical malpractice insurance is critical for physicians, dentists, nurses, anesthesiologists, and anyone who works in the medical profession.
What is Medical Malpractice Insurance?
If you're a doctor or some type of healthcare provider, you’ve likely heard of medical malpractice insurance before. Medical malpractice is a type of liability insurance for physicians and healthcare providers.
It falls under the umbrella of errors and omissions (E&O) coverage, which protects businesses and professionals from claims of negligence. It's also sometimes referred to as medical professional liability insurance.
Medical malpractice insurance will protect you from financial and legal responsibility if one of your patients claims they were injured during treatment. For that reason, most states require healthcare professionals to purchase medical malpractice insurance coverage.
Why Is Malpractice Insurance Important?
Doctors perform a necessary service for their patients, and this service comes with a certain level of risk. No doctor or healthcare provider likes to imagine that one of their patients could be harmed during the course of medical treatment.
However, the reality is that even the best doctors make mistakes, and even a small mistake could have long-lasting implications for your personal life and career. This is because when errors occur, that patient could decide to file a lawsuit against you.
According to the American Medical Association (AMA), 34 percent of all doctors have been sued at least once. In addition, nearly half of all physicians aged 55 or older have been the target of a lawsuit.
Without insurance, even one medical malpractice lawsuit could bankrupt your practice and everything you’ve worked for.
Professional liability insurance will protect your practice as well as your personal assets. It'll cover all of your legal costs, regardless of whether you win or lose the case in trial. Also, it'll compensate you for any lost wages due to an ongoing court case.
Ultimately, the biggest reason to purchase medical malpractice insurance is for peace of mind. You can focus on doing your best for your patients without worrying about any unintended financial or legal ramifications.
Options Available for Malpractice Insurance Purchases
The two most common types of malpractice insurance are occurrence and claims made policies. Occurrence policies provide complete coverage during the policy’s term, no matter when the claim is filed.
This policy guarantees coverage over both the life of the patient and the physician. For that reason, it’s the preferred type of coverage for most physicians. However, it’s not available in every state, so you might have to take out a claims made policy instead.
Claims made policies provide coverage for claims that occur and are filed when the policy is in effect. Therefore, the coverage largely depends on the timing of when the claim is made.
This type of policy has some obvious disadvantages since you can’t anticipate when a patient might decide to take legal action against you. Claims made policies have to be renewed on an annual basis.
If you choose to purchase this type of coverage, it’s a good idea to buy some type of tail insurance as well. This will ensure that you’re protected even after your coverage expires.
What's Covered?
Here is an overview of typical malpractice coverage:
- Misdiagnosis
- Delayed diagnosis
- Medication errors
- Childbirth-related injuries
- Surgical errors
- Errors in administering anesthesia
- Attorney fees
- Court costs
- Fees and damages
- Costs associated with settling prior to trial
- Judgments awarded to a former patient
You may want to consider purchasing an additional policy to cover cyber liability. This will protect your practice in the event that a patient’s confidential medical records are exposed during a cyber breach.
What Isn’t Covered
Here's a brief list of the incidents that won’t be covered by medical malpractice insurance:
Illegal actions by the physician
Sexual misconduct
Inappropriate alterations of medical records
The Critical Nature Of This Insurance Can’t Be Understated
If you're a physician or a medical professional, it's likely that, at some point, you’ll be the victim of a lawsuit. That’s why it’s crucially important that you purchase malpractice insurance.
According to the AMA, the majority of all medical liability lawsuits are dropped or dismissed. But even still, the average claim still resulted in over $30,000 worth of legal fees. And in the rare case that the claim did go to trial, 88 percent resulted in favor of the defendant.
By purchasing medical malpractice insurance, you’re safeguarding your practice and your financial future. To get started, you can work directly with an insurance agent or speak to your employee about acquiring coverage through the company they use.