Medical Malpractice Insurance for Small Business

Being a doctor isn’t easy, but it is considered to be one of the most rewarding career paths out there.

Doctors spend many years getting the right education so that they can provide the best service to their patients.

However, this doesn’t mean doctors aren’t at risk. One wrong diagnosis can leave a medical professional in a world of pain.

Let us introduce you to Medical Malpractice Insurance. The insurance that can protect a medical professional and help a medical practice stay up-and-running in the case of a lawsuit.

Read on to understand if Medical Malpractice Insurance is right for you.

What Medical Malpractice Insurance Is All About:

What Is Medical Malpractice Insurance Coverage?

Medical Malpractice Insurance is coverage that provides legal aid and protection if a medical professional were to be sued by a patient. This can take several forms. In some cases, this insurance coverage will provide monetary assistance for a doctor to hire a lawyer. In other instances, the insurance company will provide their own “in house” lawyers to represent the policyholder. It’s also common for malpractice insurance to pay some or all of the claim if the plaintiff’s lawsuit is successful.

What Does Medical Malpractice Insurance Cover?

Getting into details...

Sued doctors

In some cases, this type of insurance policy will only provide funds to the doctor if he or she is sued. The doctor must find legal counsel on their own, using these funds. Depending on how these policies are written, the lawyers will either receive payment from the insurance company directly, or the doctor will pay upfront and then be reimbursed for his or her legal expenses.

Award or settlement amount

If the case is lost or a settlement is reached, malpractice insurance will pay to cover all or a portion of the award or settlement amount. This amount is dependent on the term limits that are written into the policy.

Backup policy

Some of these policies provide no funds for a lawyer. They are typically a good idea for doctors in situations where a backup policy or their employer will provide legal counsel. Note: a growing number of malpractice insurance policies directly provide legal counsel to their policyholders.

All medical fields

Those searching for nursing malpractice insurance, RN malpractice insurance, pharmacist malpractice insurance, chiropractic malpractice insurance, physician malpractice insurance or any type of insurance covering the medical field will find that Medical Malpractice Insurance companies cover all medical fields under the same insurance policy.

Who Is Covered by Medical Malpractice Insurance?

Medical Practices

Any kind of medical practice from doctor’s offices to OBGYN to pediatrics offices to hospitals will be covered under a Medical Malpractice policy should they be sued for mistakes made in the provision of medical services.
Medical Professionals

Doctors, nurses, and other medical professionals that are making diagnoses or performing medical procedures are protected by this policy. Defense costs are either reimbursed or paid directly by the insurance company for defense.

Do I Need Medical Malpractice Insurance?

This type of insurance comes in handy if your business:

Is mandated by your state to carry this form of coverage
Is required by your hospital, clinic or medical services company
If you and/or your business interact(s) with patients

What Are the Limits of Medical Malpractice Insurance?

Every policy of this type has different amounts of policy limits. There are several restrictions that all medical professionals considering this type of coverage should be familiar with. The individual limit is the amount that the insurance company will pay for a single claim. This typically only applies to the ultimate settlement or award amount, not the cost of counsel.

The aggregate limit is the total amount that a policy will pay during an established period of time (typically one year). This can cover multiple claims. These two limits are often written together so that a policy with a $1,000,000 individual limit and a $3,000,000 aggregate limit would be displayed as a $1M/$3M Medical Malpractice Insurance policy.

There can also be limits on the amount that is paid towards the cost of legal counsel. Since most policies simply provide their policyholders with an in-house lawyer, however, these limits are not typical.

In addition to that...

These insurance policies can be written in several different ways, allowing them to cover a variety of situations. This type of insurance provides legal representation and money towards a settlement (if there is one). Not all policies work the same way, however. It is important to note that some medical professionals will not need to seek out their own Medical Malpractice Insurance. Instead, they will likely be covered by the policy in place for the entire business. Nurse malpractice insurance and physician assistant malpractice insurance are therefore unnecessary as individual policies.

You'll Know It's the Right Policy If It Covers:

Doctor errors resulting in bodily injury
Medical expenses and personal injury
Defense fees
It covers you, as well as your business (should you own it)

What Does Medical Malpractice Insurance Not Cover?

Cases in which a patient sues for reasons other than medical ones

This type of insurance will not cover cases in which a patient sues for reasons other than medical ones. For example, mishandling patient records, sexual misconduct, theft, and harassment would not be covered under these policies, even if these suits and/or allegations are made at the same time as a claim. If this is a concern, it may be a good idea to explore a general liability policy for the individual or the clinic.
Medicare fraud

Doctors would also note that this type of insurance policy typically does not provide any protection against being accused of Medicare fraud (or being the victim of such fraud). This is usually a separate type of coverage.
Certain professions related to the medical field

Certain professions related to the medical field will also not be covered under this type of policy. Physical therapy malpractice insurance is more commonly an extension of a Professional Liability Insurance policy, for example. The same can be said for Legal Malpractice Insurance, which will not cover attornies who are representing clients based on medical-related issues.
Mishandled records

Mishandled records are not covered by Medical Malpractice insurance.
Employee disputes

Employee disputes are not covered by Medical Malpractice insurance.

How Much Does Medical Malpractice Insurance Cost?

The cost can vary significantly based on a number of issues. Policy premiums are often based on a medical professional’s previous record of malpractice cases, the geographic area he or she is practicing in, and the particular field that he or she practices in. It’s also possible for factors, such as length of employment and the history of the employer to be considered when computing premiums.

From here, premiums are then based on the total amount and type of coverage purchased. Like all insurance, higher coverage limits tend to come with higher premiums.

Frequently Asked Questions

What are Claims Made and Occurrence Policies?

Medical malpractice insurance is almost always a claims-made insurance policy. What this means is that a claim must be made during a policy term while it is still active, and must not be before the retroactive date on the declarations page. An occurrence policy means that claims can only be made for incidents that happen within the policy period.

What is the difference between Medical Malpractice and Professional Indemnity?

Professional Indemnity insurance is only designed to pay for financial losses that you cause to your customers. If a claim is made regarding bodily injury or property damage, this is not going to be covered. However, Medical Malpractice will certainly cover losses pertaining to injury or illness caused by your mistakes made in the provision of medical services.

Is Medical Malpractice Insurance mandatory?

Depending on the state, Medical Malpractice is required by law with differing minimum limits. It is recommended to carry at least a $1 million liability limit or more depending on your services and asset size.

Do you need more coverage?

Disability Insurance

This insurance offers protection to employees who are unable to work for a period of time due to a disability.

Pollution Liability

This specialized insurance policy covers liability associated with pollution. An Environmental Impairment policy may also cover cleanup costs.

Crime

This type of insurance helps you cover the losses resulting from criminal acts such as robbery, burglary and other forms of theft. Many businesses choose Crime Insurance policies that allow them to file claims for internal theft or other offenses with the potential to cause financial problems.

Employee Benefits Liability

This plan covers an employer in the event of an errors or omissions claim from an employee around a benefits plan. Errors and omissions covered in this plan can include failure to advise an employee of benefits they are entitled to, failure to enroll an employee, and giving incorrect advice in regards to benefits.

Fiduciary Bond

A Fiduciary Bond and a Fiduciary Liability policy are two separate things, but they also work together to protect your business’s retirement plan or pension fund. The bond protects the plan from losses due to dishonesty or fraud while the liability coverage provides protection in the case of breach of fiduciary duty on the part of the plan managers.

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Medical Malpractice Insurance

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