Insure Your Future

Insure Your Future

Key Considerations When Purchasing Medical Malpractice Insurance

by Sue Palmer

In the domain of healthcare, medical malpractice insurance stands as a critical safeguard for professionals. This type of coverage serves as a shield against potential lawsuits related to errors, omissions, or negligence while providing patient care. To ensure adequate protection, several key considerations should be taken into account when purchasing this form of insurance. 

Understanding the Types of Coverage

Medical malpractice insurance comes in two primary forms, which are claims-made policies and occurrence policies. Claims-made policies cover incidents that happen and are reported during the policy period. Conversely, occurrence policies cover any incident that happened during the policy period, regardless of when it is reported. Comprehending these differences is essential in choosing the right coverage.

Evaluating Limits of Liability

A significant aspect to consider is the limit of liability offered by the insurance policy. These limits determine the maximum amount that the insurance company will pay for a single claim and the total amount paid for all claims within a policy period. Careful evaluation of these limits is crucial to ensure adequate coverage. It is recommended to choose limits that are higher than the average medical malpractice claim amount to safeguard against potential financial losses.

Assessing Defense Costs

Defense costs, which include legal fees and court costs, can be substantial in malpractice suits. Some insurance policies offer separate limits for defense costs, while others include them within the overall limit of liability. Understanding how a policy handles defense costs can greatly affect overall financial protection. It is advisable to opt for policies that offer separate defense cost limits or higher overall limits to ensure adequate coverage.

Consider Policy Exclusions

Not all insurance policies cover every aspect of medical malpractice claims. Some may exclude certain procedures, such as cosmetic surgery, or limit coverage in specific states. It is important to carefully review policy exclusions and consider the types of services provided to ensure that the insurance coverage is comprehensive and applicable to the specific practice.

Considering Consent to Settle Provisions

Some medical malpractice insurance policies contain a 'consent to settle' clause. This provision gives the insured the right to approve or deny any settlement offer. As this can significantly impact the outcome of a claim, it is important to consider this factor when selecting a policy. Additionally, some policies may require the insured to contribute to the settlement amount if they deny a reasonable offer.

Selecting the appropriate medical malpractice insurance is a multifaceted decision that requires a comprehensive understanding of policy types, liability limits, defense costs, policy exclusions, and consent to settle provisions. These factors collectively influence the level of protection and peace of mind for healthcare professionals. 

Learn more from an insurance company near you, like The Somerset Group.


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Insure Your Future

Purchasing insurance — the right insurance — is one of the smartest things you will ever do. While there are definitely differences between homeowners, car, life, and health insurance policies, they all serve the same purpose when it comes down to it. Insurance protects you against financial ruin should a tragedy happen in your life. In the case of homeowners insurance, that tragedy could be a fire or a flood. In the case of life insurance, that tragedy would be your death. The more you learn about insurance, the better the decisions you'll make when purchasing it. So dive into the articles here, and start reading.