Medical malpractice insurance

Medical Malpractice occurs when a medical professional is proven to have acted in a way that is negligent when treating a medical condition or emergency. Examples of malpractice may include an unreasonable delay in treatment or diagnosing a specific medical condition, the complete failure to diagnose a specific medical condition or disease, the misdiagnosis of a specific medical condition or disease and the failure to provide treatment that is appropriate for a specific medical condition or disease.

Medical malpractice insurance is becoming more and more necessary as more malpractice cases are heard in court today than ever before. This type of insurance is designed to protect medical professionals and most states require some sort of professional liability coverage to offset the costs and risks associated with lawsuits that are based on medical malpractice.

Medical malpractice insurance is typically bought through commercial companies or companies that are owned by physicians. Hospitals and other healthcare facilities typically purchase this insurance as well as the medical professionals who work there. When physicians are employed by the government, they are insured by the government so they are not typically required to purchase malpractice insurance for themselves. Premiums for medical malpractice insurance are typically set based on the payout that is expected for particular risk groups, expected administrative expenses, future investment income and the profit rate. Information is considered on past expenses and losses as well as other information about the healthcare professional and the association when determining premium rates. Premiums may also be priced depending on the geographical area in which the physician practices as well as the physician’s specialty.

Malpractice insurance is strictly regulated by each state’s commissioners to make certain that these rates are not overly expensive and that all physicians and other healthcare professionals are treated equally. There are basically four types of medical malpractice insurance. These are Claims Made, Prior Acts, Tail Coverage and Occurrence Coverage.

Claims Made Coverage provides coverage for all incidents that may occur while the insurance policy is in force. In order for the incident to be covered, the claim must be filed while the insurance policy is in force. If a policy is cancelled or a healthcare professional changes insurance carriers or policies, the policy will cease to cover any claims made after that time. This is true even if a malpractice act happens while the policy is effective. These types of policies are based on current experience and not on the potential liabilities of the future.

Prior Acts and Tail Coverage or Nose Coverage policies are designed to offer additional coverage to handle those claims that may be made after a Claims Made policy is no longer in force. If an alleged malpractice happens while the policy is in force, but it not claimed until after the policy has lapsed then this coverage would kick in. It is important to note that many medical malpractice suits are not filed for years after the alleged acts occur. Since this is the case, Prior Acts coverage helps to protect the healthcare professional for any acts that are claimed but not reported immediately. Tail coverage policies are those that are purchased from the same company that held the canceled Claims Made policy.

Occurrence coverage insurance is much like consumers’ home insurance. These policies cover incidents when they are claimed, no matter how long that may be after the alleged incident took place. They offer coverage even in cases where the policy has been canceled after the alleged act occurred. As long as the policy was in force when the alleged act happened, Occurrence Coverage will cover it. The main advantage to choosing this type of medical malpractice insurance coverage is in the fact that it eliminates the need for supplemental coverage such as Prior Acts and Tail Coverage policies. This is also the most expensive type of medical malpractice insurance, which is a disadvantage in many cases.

Last updated on Oct 11th, 2010 and filed under Health Insurance. Both comments and pings are currently closed.

1 Response for “Medical malpractice insurance”

  1. Dexter says:

    Thanks for the post. It’s important to realize that with the recent reform talks in Congress, there are sure to be some changes for the medical malpractice insurance industry.

    Nonetheless, malpractice insurance will always be of upmost importance for healthcare professionals. I aspire to be a doctor someday and was looking into medical malpractice insurance the other day. During my search I found eQuoteMD, and I’ve learned a lot about my options. Just thought I’d share for anyone else out there in the same situation.


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