Professional Liability Insurance

What is Medical Malpractice Insurance?


Professional liability and medical malpractice insurance

What healthcare professionals need to know about medical malpractice insurance 

Malpractice. It’s a word that keeps many a healthcare professional up at night. Though physicians, nurses, therapists, and other professionals train for years to provide the best possible care for their patients, everyone makes mistakes.  

What is malpractice? 

Though not as high as previously thought, medical errors still account for approximately 22,000 deaths in the U.S. every year. A patient who believes they were harmed by a healthcare professional’s negligence can sue and seek compensation for injury, medical expenses, property damage, or, on behalf of a loved one, wrongful death.   

In these lawsuits, the patient must prove key elements: 

  • The healthcare professional owed a duty to the patient, which they then breached 
  • The patient received an injury caused by that breach 
  • The patient has resulting damages, whether physical, emotional, or both  

Medical malpractice insurance offers some assistance and protection to licensed healthcare professionals from liability in these lawsuits.  

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Types of insurance 

A form of professional liability insurance, medical malpractice insurance generally covers negligence, errors, and/or omissions in the rendering of healthcare services.  

According to the National Association of Insurance Commissioners (NAIC), there are two basic types of insurance: 

  • Claims-made: This policy covers claims that occur within the timeframe specified by the policy. It is the most common type of medical malpractice insurance policy. While they have clear start and end dates, claims-made policies often come with the option of tail-coverage, which can extend a policy. 
  • Occurrence-made: This policy covers a loss that happens during the time the policy was in effect, no matter when the claim was made, even if the policy holder is no longer insured. 

What does medical malpractice insurance cover? 

Though by no means an exhaustive list, most malpractice insurance policies cover the following areas 

  • Incorrect diagnoses 
  • Treatment errors 
  • Medication errors  
  • Injuries related to care 
  • Unnecessary surgeries 
  • Premature discharge 

However, there are some areas insurance policies will not cover. Some of these include: 

  • Altered medical records 
  • Criminal acts 
  • Cyber liability (e.g. a data breach) 
  • Claims of patient discrimination or abuse 
  • Patient accidents 
  • Sexual misconduct 

Why you may need insurance 

Many states require licensed professionals, including those in healthcare, to have professional liability insurance for business or contract purposes.  

For example, nurses should check their employer’s policy to ensure it covers the care and services they regularly provide. There may be gaps in your employer’s insurance, such as: 

  • Policy limits may not be high enough to protect you and your co-workers  
  • Coverage may not include lost wage or licensing board reimbursement  
  • Coverage may not extend to services performed outside of the workplace, such as when you engage in volunteer services 

Questions to ask when evaluating insurance policies 

Medical malpractice insurance coverage options vary. It’s vital to find the policy that best fits each professional situation. Here are a few things to consider when evaluating insurance. 

  • Is the policy occurrence-made or claims-made? 
  • What are the liability limits? The most common limits purchased are $1 million per claim or $3 million aggregate. Be sure to check any contractual requirements for specific limits. 
  • Are attorney expenses and fees included within the liability limits? 
  • Are there any supplemental coverages? Popular options include licensing board reimbursement, deposition expense, wage loss and expense, HIPAA, etc. 
  • Is the insurance provider and company known for their experience with healthcare and healthcare professionals? 

This article is provided for informational purposes only and does not constitute legal advice. Please consult a legal professional when evaluating a professional liability insurance policy.