Episode 40: How to Choose Your Best Malpractice Coverage

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July 21, 2021

As a physician, regardless of your specialty or where you practice, you want to have malpractice insurance.  Today I’ll tell you about the different types of malpractice insurance and some of the things you are going to want to consider when trying to evaluate which is the best plan.

Types of malpractice insurance policies: 

  • Claims-Made Coverage
    • With a claims-made policy, your insurer will only cover malpractice claims if the claim is made against you while you are covered.  With claims-made coverage you will need tail coverage if you leave the practice or insurance company.
  • Occurrence Coverage
    • This is the broadest and most protective type of medical malpractice policy. With this policy, it does not matter when a medical malpractice lawsuit files, so long as the incident occurred during the policy period.
  • Claims-Paid Coverage
    • With this coverage, the claim is not recognized until the indemnity pays out or the claim closes. The downside of this type of coverage is that if you do have a claim made against you, as long as your claim remains open, you will need to maintain coverage with the claims paid insurance carrier. This could mean years of paying premiums that you don’t want to pay until the claim is closed (often 3-4 years) or an even larger tail payment to get out of the policy if needed.

Factors affecting malpractice insurance costs

  • How much coverage you need will directly affect how much you will pay in insurance premiums. 
  • Your prior claims history. 
  • Where you work also factors into how much you’ll pay in insurance premiums.
  • Regardless of your location, claims history, and coverage amounts, certain specialties are always going to pay more than others.

Bring down the cost of your malpractice premiums when you are first starting out by selecting a claims-made policy with a maturation date. With this policy,  the rates you pay increase over time from year one to year five.

What your malpractice insurance policy will cover and what it won’t

Will cover:

  • Any claim made against the medical provider because of bodily injury based on: the services provided, a lack of services provided or medical negligence on the physician’s part. 
  • Legal counsel and covers your defense costs, both preceding and during trial (should your claim go that far). 

Won't: 

  • Sexual misconduct on the part of the physician 
  • Illegal acts 
  • Services performed while under the influence of alcohol or drugs

You need malpractice insurance for your practice in addition to each individual provider. 

Before You Sign Up for a Policy:

  • Be sure to compare prices and policy terms from different insurers in order to make the most informed decision. 
  • Read it thoroughly and make sure you are getting the most value for your money and that you understand what your policy covers (and what it doesn’t cover) before you sign up.

For a full searchable copy of the transcript, click here

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