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What Are the Different Types of Medical Malpractice Insurance?

What Are the Different Types of Medical Malpractice Insurance?

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Medical malpractice insurance is designed to protect doctors and other health professionals from legal proceedings related to their pratice of medicine. Med mal insurance covers legal costs and settlements, i.e. costs of defending providers from lawsuits and damages conferred by the court.


A healthcare provider’s insurance premiums are closely connected to the medical specialty in which they are practicing and the laws of the state in which they work.


Virtually every state requires doctors to obtain physician malpractice insurance in order to practice and to see patients. Some states require health professionals to have coverage to get hospital privileges. However, there is one state where doctors can practice without malpractice insurance at all --in other words, they can “go bare." This is the state of Florida.  Florida allows physicians to be uninsured as long as they keep their patients informed of this fact or secure a surety bond, per Florida state regulations.

Physicians, physician assistants, and other healthcare providers can obtain malpractice insurance coverage on their own or receive it through their employers, often from their hospital.  Providers should find out if their institution will cover them, or if they need to find coverage on their own. 

Types of Malpractice Insurance for Doctors

Medical malpractice insurance policies regularly fall into two types: “claims made” and “occurrence."


A claims-made policy is the most common type of medical malpractice insurance. It protects the policyholder against claims of medical malpractice filed during the policy’s in force period. Since a physician can still have a claim filed against him or her after a claims-made policy ends, most physicians need to purchase separate tail coverage to ensure that they continue to be protected. 


Regarding cost, claims-made policies start out fairly inexpensive (compared to an occurrence policy), and increase in premium from year one of the policy to about year four or year five, and then they generally plateau in cost. 


An occurrence policy protects the policyholder against claims of medical malpractice that occurred while the policy was in effect. This type of policy essentially has the tail policy built into the pricing, so purchasing a separate tail insurance policy is unnecessary. If the policy is canceled for any reason, the insurance company will defend any claim brought against the policy holder during the period they were covered prior to cancellation under the policy. 


A third, lesser-known type of policy is called a claims-made slot-type policy.  This type of policy is usually specific to emergency room groups and urgent care practices.  Typically, it is set up as a group policy and allows individual healthare providers to leave the policy without purchasing a tail as long as the policy is in effect.  With a claims-made slot-type policy, the only time you would have to purchase a tail is if the main group policy is terminated.  This type of policy essentially allows practitioners to "slot" in and out of the policy.   


Finally, several factors are taken into account when insurers determine premiums for medical malpractice insurance. One of the most significant factors is the type of work that a health professional does. Some specialties have to pay higher premiums due to the fact that they have higher rates of claims. Neurosurgery, obstetrics/gynecology and anesthesiology are considered to be higher-risk specialties. Another important factor in premium pricing is the state and county in which a doctor practices.


If you would like more detailed information, or additional definitions for common medical malpractice insurance terminology, please refer to our glossary.


Be sure to protect yourself with physician malpractice insurance.  Contact Nexus Insurance Services to get a free no-obligation quote.

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