What Does Medical Malpractice Insurance Cover?

Medical malpractice lawsuits against doctors, physicians, healthcare providers, and fitness professionals have become increasingly common. A 2016 study conducted by the American Medical Association found that approximately 34% of all physicians nationwide have been sued for medical malpractice at some point over the course of their careers. Statistics gathered by JAMA Network suggest that a misdiagnosis of patients causes a third of these suits. While some of these claims go nowhere, many physicians face a lengthy (and costly) legal battle. 

If you are currently seeing patients, it is important that you are covered by medical malpractice insurance. Broadly, this form of insurance covers you in the event that you unintentionally commit medical malpractice or are accused by a patient of malpractice you did not commit. However, it is important to understand the specifics of your medical malpractice insurance to make sure you are adequately covered. 

Types of Medical Malpractice Insurance

What does medical malpractice insurance cover? In most cases, medical malpractice insurance will pay out for attorney compensation, court fees, settlement payments, punitive damages, and personal injury damages, but only if you are covered by insurance. To fully answer the question of coverage, it is important to distinguish between the two main types of medical malpractice insurance policies: “occurrence-made” and “claims-made.”  

Claims-Made Malpractice Insurance

“Claims-made” insurance is the more limited option of the two. If you have a claims-made policy, you are only covered if the same company still insures you when the claim is filed against you. If you have since changed medical malpractice insurers and are sued by a past patient, a significant gap in your malpractice coverage may result in out-of-pocket costs. Without this coverage, the costs associated with medical malpractice lawsuits could result in potential bankruptcy and the loss of your practice. Therefore, many healthcare professionals supplement employer-provided claims-made policies with occurrence-made policies.

Occurrence-Made Malpractice Insurance

“Occurrence-made” malpractice insurance is much more flexible. Under occurrence-made coverage, physicians are covered in their new position and/or location even if they change insurance companies. In other words, if you had an occurrence-made policy whenever the alleged malpractice occurred, you will be covered by that medical malpractice policy even if you have since switched insurers. 

Review Your Coverage

Do you need help determining which type of coverage you have? Doctors and physicians employed at a hospital are likely already covered by their employer. If this describes you, check your existing medical malpractice insurance coverage. However, if you run your own practice or practice independently, it is your responsibility to ensure you are adequately covered. It is recommended to take out an occurrence-made insurance policy to avoid a potential gap in coverage. 

How Much Does Medical Malpractice Insurance Cost?

How much should healthcare professionals or employers expect to pay in medical malpractice insurance? Medical malpractice coverage is customized to suit the needs of the insured. On average, medical professionals can expect to pay between $4,000 and $12,000 in annual medical malpractice coverage. However, due to a variety of factors, there is a wide range of coverage costs, and you could very well face higher premiums. To assess your coverage needs, consult with a qualified insurance professional to estimate the total cost of your annual medical malpractice coverage.

What Isn’t Covered By Medical Malpractice Insurance?

Medical malpractice insurance exists to cover doctors, physicians, or fitness professionals in the event a patient claims they were negligent or ineffective in providing care and services. However, if the physician or provider is found to have been engaging in criminal or intentionally harmful activities, they are no longer covered by their insurance provider. Medical malpractice insurance policies typically do not cover the following actions and issues:

Illegal Activities

Illegal activities are not covered by any form of insurance. For example, one of the most common crimes for which healthcare professionals are prosecuted is selling prescription medications illegally. Illegal activities like these cannot be handled in a civil court and will likely result in criminal charges. Your medical malpractice insurer will not cover the cost of legal defense or other financial damages as a result of illegal activity. 

Sexual Misconduct

Sexual misconduct (including a range of behaviors from inappropriate advances to assault) is an abuse of a healthcare professional’s power and a betrayal of a patient’s trust in their physician. Patients have the right to seek financial or legal restitution after suffering sexual misconduct during their treatment. Insurers are not obligated to pay out for the damages caused by a healthcare professional’s sexual misconduct. 

Irresponsible Alterations to Official Medical Records

Keeping accurate records is crucial in maintaining a physician’s credibility and patients’ confidence regarding their medical history. Without accurate records, patients cannot trace their symptoms over time and may not receive the care they need. Depending on the circumstances, altering official medical records could be considered gross negligence or purposeful obstruction of information. If a patient claims that their records were inappropriately changed, your insurance policy will not cover you in the event of a lawsuit.

Practicing Under the Influence

Professional healthcare providers should never provide care while under the influence of drugs or alcohol. Without a clear head and sound mind, even experienced physicians can commit dangerous or fatal errors while caring for their patients. Most insurance policies will not cover malpractice (even accidents) caused by a physician’s inebriated state.

Cyber Security Issues

If there are issues with your facility’s cyber security or hackers gain access to confidential patient records, medical malpractice insurance will not cover you if the affected patients decide to sue. To prevent this issue, you may consider implementing a cybersecurity policy to protect your business. A cyber security insurance policy will give you the confidence to safely and accurately store patients’ records and files. 

How Medical Malpractice Insurance Companies Determine Liability

One of the most important factors in determining the cost of your medical malpractice insurance policy and the extent of your coverage is your estimated liability. Insurance companies use a variety of factors to determine the estimated liability of a healthcare professional seeking malpractice coverage. The following examples are the main factors your insurer will consider when calculating your total liability. 

Years of Experience

How many years have you practiced in your field? The amount of time you have been employed as a healthcare professional is important in determining your liability. For example, a medical malpractice insurer may see a new physician as a higher risk than a physician who has practiced for many years and has a wealth of practical experience.

Full-Time or Part-Time Employment

Not all healthcare professionals work full-time. As a part-time healthcare professional, you likely see fewer patients than those employed full-time. For example, surgeons will have a much higher premium because they are more likely to be sued than orthodontists.

Practice Area

If you practice in a “riskier” field of medicine, you will likely require a higher level of coverage. Because of the associated risk in some fields, practitioners are much more likely to face malpractice suits from patients who have suffered severe injuries. For example, because surgeons are more likely to be sued than orthodontists, they will have a much higher premium.  

Geographic Location

The state where you practice may have laws requiring a certain amount of medical malpractice coverage. For example, healthcare professionals in New York, Pennsylvania, and Rhode Island are required to carry medical malpractice insurance. If your state does not require medical malpractice insurance, you may pay less overall than physicians in state with required minimum coverage.

Previous Malpractice Claims

Like any other insurance, a previous history of risk will increase the insured’s monthly premium. If you have faced multiple medical malpractice claims in the past, you will likely pay more for your coverage than a physician with no prior history of medical malpractice claims.

Resources for Victims

If you are facing a medical malpractice lawsuit, you may be worried about the future of your career, your business, or your staff. While outcomes of medical malpractice lawsuits vary, you can protect your emotional, financial, and professional well-being with the right resources and tools throughout the litigation process. The following resources are all intended for healthcare professionals currently facing a malpractice suit.

Physician Litigation Stress Resource Center

Many physicians facing medical malpractice suits report that the experience is among the most stressful events in their entire lives. This stress can cause extreme anxiety and even self-harm in the most extreme cases. If you are struggling with the emotional ramifications of an upcoming malpractice lawsuit, you are not alone. Founded in the 1970s by Dr. Sara C. Charles, the Physician Litigation Stress Resource Center was created to help physicians navigate the emotional hurdles of the litigation process. To access the Center’s free litigation stress support resources, visit physicianlitigationstress.org to learn more.

National Practitioner Data Bank

Are you seeking information on the rate, type, and frequency of medical malpractice suits in your area? To understand new developments in medical malpractice lawsuits, the National Practitioner Data Bank has compiled a public-access database to compare data across the country. NPDB’s Data Analysis Tool can be used to review Medical Malpractice Payment Reports (MMPR) or Adverse Action Reports (AAR). Additionally, the National Practitioner Data Bank allows healthcare professionals to request a self-query to generate a report on their own information in the Data Bank. 

Practicing Healthcare Professionals in Your State

Because medical malpractice lawsuits have become so frequent, there is a good chance that many physicians in your area have previously faced litigation for medical malpractice. These physicians can be an excellent support network for you as you navigate the difficulties of a medical malpractice lawsuit. In many states, physicians maintain an online database with information about their experience with medical malpractice lawsuits to benefit other healthcare professionals.