Important Things to Consider When Buying Medical Malpractice Insurance

October 07, 2021

According to Expert Institute, plaintiffs in medical malpractice cases received a grand total of $4,031,987,700 in 2018. The average settlement was approximately $348,000, which means a claim was paid out every 45 minutes of the year. While medical malpractice cases only account for approximately 15% of personal injury claims filed each year, as the numbers indicate, the potential loss is huge. Fortunately, you can protect yourself and your practice’s reputation from costly claims with malpractice insurance.

Shopping for medical malpractice coverage

Not all malpractice insurance is created equal. When shopping for this type of coverage for your medical office, there are key considerations to make before you settle on a policy.

The company

The number one consideration when purchasing a malpractice policy is the company from which you buy it. In addition to a solid and honest reputation, check that the agency is financially solvent and has the resources to remain so long into the future. Look for a company with a lengthy history and extensive experience with malpractice insurance in particular. Finally, consider working with state-admitted carriers, as they must pay into the state guarantee fund.

Defense costs

Defense costs on med mal policies can either be inclusive or exclusive. With inclusive plans, the insurer deducts the defense costs from the total available limits of liability. When the plan is exclusive, the insurer pays defense costs without dipping into the liability coverage. The latter type is likely to cost more in monthly premiums but may be worth the investment.

Claim trigger

Med mal policies contain one of two types of triggers: incident and demand. An incident trigger means that the insurer counts the claim as reported in one of two instances: 1) A claimant, law office, or other relevant party submits a notice for claim action, OR 2) a physician informs the insurer of an incident that could result in a claim. With a demand trigger, physicians do not have the second option.

Liability limits

There are two limits to consider when shopping for a policy. The first is the single occurrence limit, which is how much the insurer will cover for a single claim. The second is the aggregate limit, which is how much the company will pay on your behalf over the course of a year.

Consent to settle

Med mal policies typically contain one of three forms of consent to settle. The first is full consent to settle, which means the carrier must have your full consent before settling a claim. The second is limited consent to settle. Per this provision, you still have full consent on whether to settle a claim. However, if the insurer recommends you settle for a certain sum and you ignore that recommendation, the insurer will only be financially responsible for the suggested amount and will not have to pay for future litigation costs. The final type is no consent to settle, which means you have no control over when to settle or for how much.

Your go-to source for healthcare practice advice

At Doctor Genius, we strive to help your practice succeed. Along with digital marketing, we provide sound advice on everything from how to discuss treatments with patients to how to shop for malpractice insurance. For the guidance you need to grow your business, call 877-477-2311 today.

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