Malpractice Insurance: Definition, Types, Importance

What Is Malpractice Insurance?

Professional liability insurance, commonly known as malpractice insurance, is a form of insurance that healthcare professionals buy. The purpose of this insurance is to protect healthcare providers from patients who sue them for alleged harm resulting from the professional’s negligence or harmful treatment decisions. Malpractice insurance also provides coverage in case of a patient’s death.

Key Takeaways:

1. Malpractice insurance is a type of professional liability insurance that is specifically designed to provide coverage for healthcare professionals. In the event that patients file lawsuits against healthcare professionals seeking damages for medical negligence, resulting in further health problems or death, malpractice insurance will provide coverage.
2. Research shows that medical negligence is the third leading cause of death in the United States, so healthcare professionals are more likely than not to require malpractice insurance. This insurance can be obtained through private insurers, employers, or organizations such as medical risk retention groups (RRGs).
3. There are two primary types of professional liability insurance: claims-made policies and occurrence policies. Malpractice insurance provides coverage for legal costs, punitive damages, and medical damages.

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Understanding Malpractice Insurance:

Malpractice insurance is a necessary coverage for most medical doctors at some point in their career. The reason for this is highlighted by a study conducted by Johns Hopkins University, which revealed medical errors to be the third leading cause of death in the United States, trailing only heart disease and cancer.

Medical malpractice can occur during various stages of healthcare delivery, such as diagnosis, treatment, or advice given after an illness. Shockingly, medical errors are responsible for around 250,000 deaths per year in the US. Moreover, healthcare professionals face a considerable risk of malpractice lawsuits, with over 17,000 lawsuits filed annually in the United States.

On average, doctors can expect to face a malpractice lawsuit every seven years, emphasizing the importance of having malpractice insurance coverage. In fact, many states require medical professionals to have malpractice coverage to work in hospitals and medical facilities.

Premiums for medical malpractice insurance depend on factors such as the physician’s specialty, location, and amount of coverage needed, rather than their claims history. Therefore, even if a physician has never been sued, they may have to pay high premiums for malpractice insurance.

Types of Malpractice Insurance:

There are several ways to obtain malpractice insurance. The simplest option is to buy an insurance policy from a private insurer for an individual or a group. Medical professionals can also purchase policies from medical risk retention groups (RRGs), which are groups of medical professionals that provide malpractice insurance. Alternatively, some employers, such as hospitals, offer coverage plans for their employees.

Government medical professionals do not need to obtain malpractice insurance because the federal government insures against liability claims. In certain situations, insurance can also be obtained through state and local agencies.

There are two types of policies available to healthcare professionals: claims-made policies and occurrence policies. A claims-made policy only covers claims that are made while the policy is in effect and when the treatment occurred. An occurrence policy, on the other hand, covers any claim made on a treatment that occurred while the policy was in effect, even if the policy has since expired.

Malpractice policies cover various costs, including legal fees, such as lawyer fees, settlement and arbitration costs, medical damages, and punitive damages.

Proving a Malpractice Lawsuit

To succeed in a medical malpractice lawsuit, the plaintiff typically needs to demonstrate that a healthcare professional failed to meet the general standard of care expected from the medical community. Three main elements must be established to prove a case:

Firstly, the plaintiff’s lawyer must show that the healthcare provider deviated from established medical protocols and acted differently than a reasonable colleague in the same field would have acted.

Secondly, the healthcare professional must have caused injury or harm, either physical or emotional, to the patient.

Lastly, there must be enough evidence to prove that the medical professional’s actions caused the harm or injury that the plaintiff is claiming.

That’s all.

Sources:

1. National Association of Insurance Commissioners. “Medical Malpractice Insurance
2. Johns Hopkins Medicine. “Study Suggests Medical Errors Now Third Leading Cause of Death in the U.S.