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December 13, 2023

What is medical malpractice insurance?

The medical industry is vast and impacts many people. Around 14.7 million people over the age of 16 work in health care, accounting for 9.3% of total employment in the United States. And no matter how detail-oriented and experienced these professionals are, mistakes are bound to happen.

The National Library of Medicine states that one in three clinicians will be sued at least once throughout their career, with some surgical specialties having a higher chance of this happening. Even though you may feel like you won’t be the person impacted by this statistic, it’s better to be safe than sorry—especially when dealing with the risky medical world.

Want to know what type of coverage is best for your health care business? Use this blog as your guide to all things medical malpractice insurance coverage.

What is medical malpractice insurance coverage?

Medical malpractice insurance coverage protects physicians and other medical professionals from liability arising from disputed services resulting in a patient’s injury or death. Most doctors or medical professionals will face this kind of lawsuit in their careers. Carrying this type of coverage is essential for most physicians and other health care professionals and is required by law in most states.

What does medical malpractice insurance cover?

Medical malpractice coverage provides financial relief for a range of expenses associated with defending and settling malpractice claims. It also pays for covered damages, including:

  • Arbitration costs
  • Attorneys’ fees and court costs
  • Care-related injuries
  • Errors in treatment
  • Medical damages
  • Misdiagnoses 
  • Premature discharge from a clinic
  • Punitive and compensatory damages
  • Settlement costs
  • Unnecessary surgery

Depending on the type of policy you have and your insurance provider, most medical liability insurance plans don't cover claims for criminal acts, inappropriate alteration of medical records, or sexual misconduct.

There are two types of medical malpractice insurance policies you can choose from:

  • Claims-made policies only cover claims if the policy was in effect when the supposed treatment occurred and when the lawsuit was filed in court.
  • Occurrence-made policies cover claims made on a treatment that occurred while the policy was in effect, even if the policy has expired by the time it’s filed in court.

Your medical malpractice policy will cover your business up to a specific limit, as determined and stated by your policy type. Your policy limit might be written as two numbers, such as $2 million/$4 million. Here’s how you can determine what those figures mean:

  • $2 million is the maximum amount your insurance company will pay per claim.
  • $4 million is the maximum amount your insurance company will pay per policy period.

What’s the difference between medical malpractice insurance and medical professional liability insurance?

Malpractice insurance is a specific type of professional liability insurance. While these two types of insurance policies have some similarities, they don’t provide the same style of coverage. Medical malpractice insurance only covers physical losses associated with a patient’s body that lead to a lawsuit. Medical professional liability insurance focuses on covering financial losses rather than physical ones. It does cover medical malpractices as well as the business premises.

Malpractice insurance is specifically tailored to help medical workers with the unique challenges they face daily. This makes them safer to practice than without this style of coverage.

How much does medical malpractice insurance cost?

No matter what type of medical liability insurance you require, there’s a policy that will work within your budget. Before figuring out which style of coverage you’ll need, it’s important to know the price will vary based on your unique situation.

Here are some of the factors your medical malpractice insurance costs will depend on:

  • How often you work 
  • Previous claims filed against you, if any 
  • Years of experience 
  • Your location and state mandates 
  • Your policy limits 
  • Your profession

Who needs medical malpractice insurance?

If your company deals with any business in the medical or fitness field, it’s important to protect your employees. Some key positions that should be secured include:

  • Doctors 
  • Licensed practical nurses
  • Nurse anesthetists
  • Nurse practitioners
  • Nursing students 
  • Personal trainers
  • Physical therapists
  • Physician assistants
  • Optometrists
  • Registered nurses
  • Surgeons 
  • Yoga instructors

Before jumping into a policy, it’s beneficial to speak directly with an insurance specialist. They can help you determine your risks and coverage needs and select the right plan for your medical practice.

Cover your medical business today

Medical professionals face numerous challenges that don’t impact other industries, including medical liability, care quality, and negligence. Our team at Marsh McLennan Agency understands these risks and is familiar with the operational complexities of running a health care practice or other medical business.

We offer specialized services based on your requirements, providing customized solutions to deliver top-notch results and peace of mind for your team. Here are some of the medical sectors we tailor coverage for:

  • Allied health care
  • Community health centers
  • Digital form
  • Home health 
  • Hospice
  • Hospitals
  • Laboratories
  • Management service organizations 
  • Pharmacies
  • Physician practices
  • Senior living organizations

If you fall into one of these categories or are interested in discovering what types of policies would protect your organization from medical malpractice claims, our team is available to answer any questions and lend guidance.

Reach out to a specialist to learn more about medical malpractice coverage today.