What Does Medical Malpractice Insurance Cover?

Medical malpractice lawsuits against doctors, physicians, healthcare providers, and fitness professionals have become increasingly common. A 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 misdiagnosis of patients constitutes a third of these suits.

The vast majority of doctors in the United States are covered by some form of medical malpractice insurance with only a small percentage of doctors practicing medicine while uninsured. But even uninsured medical professionals are often still covered by insurance policies that protect the hospitals and medical groups that they associate with. 

When you engage a medical malpractice attorney to assist you, they will be able to determine what insurance covers your particular medical provider.

Types of Medical Malpractice Insurance

What does medical malpractice insurance cover?  When your medical provider is covered by an insurance policy, your attorney can attempt to obtain compensation for you for such things as physical pain,  mental anguish, loss of enjoyment of life, disfigurement, and in some cases punitive damages. To fully answer the question of coverage though, 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 your medical provider has a claims-made policy, they are only covered if the same company still insures them when the claim is filed. If they have since changed medical malpractice insurers and are sued by a past patient, a significant gap in their malpractice coverage may result in out-of-pocket costs for the medical provider. Without malpractice coverage, the costs associated with defending a medical malpractice lawsuit can result in potential bankruptcy and even the loss of their 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 new location even though they may have changed insurance companies. In other words, if they have an occurrence-made policy, the malpractice will still be covered by that medical malpractice policy even if they have since switched insurers.

Doctors Should Review Their Coverage

Medical professionals are expected to determine  which type of coverage they  have. Doctors and physicians employed at a hospital are likely already covered by their employer, but they still should check the status of their existing medical malpractice insurance coverage. For those that run theirown practice or practice independently, it is their responsibility to ensure that they are adequately covered and take out an occurrence-made insurance policy to avoid a potential gap in coverage.

How Much Does Medical Malpractice Insurance Cost and How Is That Calculated??

As the victim of a medical malpractice event, how much healthcare professionals or employers pay for medical malpractice insurance is generally not of concern to you. Just like car insurance, you just hope and assume that others have it in case they ever cause you harm. 

Medical malpractice coverage is customized to suit the needs of doctors. 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 they may very well face much higher premiums. To assess their coverage needs, they need to consult with a qualified insurance professional to estimate the total cost of their annual medical malpractice coverage costs.

One of the most important factors in determining the cost of a medical malpractice insurance policy and the extent of coverage is a doctor’s estimated exposure. Insurance companies use a variety of factors to determine the estimated exposure of a healthcare professional seeking malpractice coverage.

Insurer Considerations for Medical Malpractice Costs and Payouts

The following are the main factors that a doctor’s insurer will typically consider when calculating the amount of money they may have to potentially pay out if the doctor commits medical malpractice.

Years of Experience

How many years has your doctor practiced in their field? The amount of time they have been employed as a healthcare professional is important in determining their 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, some professionals likely see fewer patients than those employed full-time. Insurers may feel that medical professionals who work fewer hours may have a lower level of expertise than those who work full time and therefore have higher exposure.

Practice Area

If they practice in a “riskier” field of medicine, they 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 chiropractors, they will typically have a much higher premium. 

Geographic Location

The state where they practice may have laws requiring a certain amount of medical malpractice coverage. For example, some states require a doctor to carry medical malpractice insurance, others require a certain minimum amount of coverage, and others do not require insurance at all. If your state does not require medical malpractice insurance, doctors sometimes 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 your doctor has faced multiple medical malpractice claims in the past, they will likely pay more for their coverage than a physician with no prior history of medical malpractice claims.

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, it is less likely that they will be covered by their insurance provider. Some policies cover the cost of attorney defense while others do not.  Whether a policy covers punitive damages will also depend on the policy language as well as state laws governing this issue. Medical malpractice insurance policies typically do not cover the following actions and issues:

Illegal Activities

Illegal activities are generally 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. A doctor’s medical malpractice insurer may not be obligated to cover the cost of a doctor’s legal defense or pay a victim for financial damages that were a result of such an illegal activity. Exceptions do exist however and sometimes a doctor can be forced to pay damages from their own personal savings and assets if the insurance policy cannot be accessed. Criminal charges against a healthcare provider may result in those cases as well.

Sexual Misconduct

Sexual misconduct (which includes 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  compensation  after suffering sexual misconduct during or related to their treatment. Although insurers are not always obligated to pay compensation  for the damages caused by a healthcare professional’s willful sexual misconduct, depending on the State and the facts of the case, successful lawsuits are very common as well.

Irresponsible Alterations to Official Medical Records

Keeping accurate records is crucial to 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 may be considered gross negligence, purposeful obstruction of information, and in some States a criminal offense. If a patient claims that their records were inappropriately changed and they suffered harm as a result, a medical provider's insurance policy may or may not be obligated to pay financial compensation in the event of a lawsuit. An attorney licensed in your state can determine this for you.

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. Just as is the case with other willful and reckless acts, whether an insurance policy will cover malpractice occurring as a direct result of  a physician’s intoxicated state will vary, depending on the insurance company and the State involved.

Cyber Security Issues

If there are issues with your medical provider’s’s cyber security or hackers gain access to confidential patient records, the question of whether a medical malpractice insurance company will cover the breach in the event that affected patients decide to sue will also depend on the policy and the State involved. Where available, many policies require the medical provider to pay extra for such coverage. To prevent this potential problem, many doctors implement a cybersecurity policy to protect their business. A cyber security insurance policy gives them the confidence to safely and accurately store patients’ records and files. 

Resources for Victims

If you are considering a medical malpractice lawsuit, your best resource will be a qualified medical malpractice attorney. Expertise.com has a directory, independently-researched, of the best medical malpractice lawyers in your area. You can also call 848-BookPro to talk to an attorney today.

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.