What is malpractice insurance?

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Malpractice insurance is a type of professional liability insurance purchased by healthcare professionals. This insurance coverage protects healthcare providers against patients who sue them under a claim that they have been harmed by professional negligence or intentionally harmful treatment decisions. Medical malpractice insurance also covers the death of a patient.

Main advantages

  • Malpractice insurance is a type of professional liability insurance intended to cover healthcare professionals.
  • Patients can file lawsuits against healthcare professionals seeking damages for medical malpractice that resulted in further health problems or death.
  • Studies show that medical malpractice is the third leading cause of death in the United States, so a healthcare professional will most likely need malpractice insurance.
  • Malpractice insurance can be obtained through a private insurer, an employer, or organizations such as medical risk retention groups (RRGs).
  • The two basic types of professional liability insurance are claims policies and occurrence policies.
  • Legal costs, punitive damages, and medical damages are all covered by malpractice insurance.

Understanding malpractice insurance

Most doctors will need malpractice insurance at some point during their professional career, and for a good reason. A study by Johns Hopkins University and included by the Centers for Disease Control and Prevention (CDC) in its list of leading causes of death in the US lists medical malpractice as the third leading cause of death in the United States, behind heart disease and cancer.

Medical malpractice can happen during diagnosis, during treatment, or as part of the advice given for treatment after an illness—approximately 250,000 deaths in the US result from medical errors every year.

Some studies show that more than 17,000 malpractice lawsuits are brought to healthcare professionals every year in the United States. An average American doctor can expect to have a medical malpractice lawsuit filed against them once every seven years. This underlines the importance of malpractice insurance for healthcare professionals.

States require medical professionals to have current malpractice coverage to work in hospitals and other medical facilities. Medical malpractice insurance premiums are generally based on the physician’s specialty and geographic location, not claims experience. This means that even if a doctor has never been sued, he could end up paying extremely high premiums. Premiums can be high due to factors such as the amount of coverage required, severity of claims, frequency of claims, location of practice, and area laws.

Types of malpractice insurance

There are many options for getting malpractice insurance. An insurance policy can be purchased for an individual or group by a private insurer in the most basic form. Individual or group policies can also be purchased by a medical risk retention group (RRG). An RRG is a group of medical professionals organized to provide malpractice insurance. Another option for getting medical malpractice insurance is under an employer’s coverage plan, such as a hospital.

Individuals who work as medical professionals under the government do not need to obtain malpractice insurance as the federal government ensures against liability claims. Often, insurance can also be obtained through state and local agencies if the situation deems it necessary.

A healthcare professional can purchase two types of policies: a claims policy or an incident policy. A claims policy only covers claims if the policy was in effect when the treatment took place and when the claim was initiated. An incident policy covers any claim made in treatment that took place while the policy was in effect, even if the policy has already expired.

The types of costs covered by a malpractice policy are broad. They include all legal fees such as attorney fees, settlement and arbitration costs, medical damages, and punitive damages.

Proving a malpractice lawsuit

In a medical malpractice lawsuit, the plaintiff must prove that a medical professional violated a patient’s general standard of care as defined by the medical community. To succeed in a medical malpractice lawsuit, three things generally need to happen:

  1. The plaintiff’s attorney must prove a violation of medical protocol that resulted in a physician choosing a different course of action than a colleague would have taken.
  2. The medical professional causes physical or emotional harm
  3. There must be sufficient evidence proving that the medical professional caused the harm.
By aamritri

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