Working in the health-care industry often comes with quite a bit of liability. In a way, with every patient seen or procedure done, your small medical practice is put at risk.

So, what can you do to protect yourself? Medical malpractice insurance can help cover costs associated with medical mistakes and negligence. No matter how long you have been practicing, malpractice insurance is usually an excellent safety net.

Having medical malpractice insurance can provide you with peace of mind and even be the difference between your practice taking a hit and shutting down completely. Learn more about malpractice insurance to see how valuable it is to every physician.

In this guide, we’ll answer, “how does medical malpractice insurance work?”, “what does malpractice insurance cover?”, and more.

What is Malpractice Insurance?

If you’re wondering about malpractice insurance, you’re probably not alone. Medical malpractice health insurance, also known as medical liability insurance, is meant specifically for health-care professionals. This type of liability insurance may protect physicians and other licensed health-care professionals if one of their patients decides to sue. Medical malpractice insurance might help with events and costs such as:

• Bodily injuries resulting from wrongful practice
• Medical expenses
• Legal costs

Types of Malpractice Insurance

There are there two main types of medical malpractice insurance that you should be aware of.

The first is called a claims-made policy. This means that if you file a claim for malpractice insurance, it covers you at your current coverage level. You file a claim for a certain amount of money, the insurance company takes a look at the claim when you file it, and you are reimbursed accordingly.

The other type of policy is called an occurrence policy. This is a policy that provides you with coverage for long-tail events. For example, there might be years between when the event happens and when a lawsuit is filed. An occurrence policy provides you with coverage at the amount that you had during your original policy year. This means that your exact level of protection might be significantly lower than it is right now, which can limit the amount of protection you have.

Understanding Professional Liability Insurance

 Professional liability insurance, also known as errors and omissions (E&O) insurance, is a type of coverage designed to protect professionals from claims of negligence or inadequate work. This insurance is crucial for individuals in various fields, including healthcare, legal services, and financial advising. Professional liability insurance can help cover legal fees, settlements, and other expenses resulting from claims of errors, omissions, or negligence in the course of providing professional services. It provides peace of mind and financial protection for professionals who may face lawsuits alleging mistakes or failure to perform their duties properly. Understanding the importance of professional liability insurance is essential for anyone working in a profession where errors or oversights could lead to legal action.

Examining Errors and Omissions (E&O) Policies

 Errors and omissions (E&O) policies, also known as professional liability insurance, are designed to protect professionals from claims of negligence, errors, or omissions in their professional services. These policies are essential for individuals and businesses in various industries, including healthcare, real estate, and financial advising. E&O insurance provides coverage for legal expenses, settlements, and judgments resulting from claims made by clients or customers who allege that the professional’s work or advice caused them harm. It helps protect professionals from financial losses and reputational damage associated with lawsuits and legal disputes. Understanding the coverage and benefits of E&O policies is crucial for professionals who want to safeguard their livelihood and assets against potential risks and liabilities.

How Malpractice Insurance works

So, how does dental malpractice insurance work? This is a liability insurance policy that provides you with protection against claims of medical or dental negligence. For example, if someone files a lawsuit against you because you missed a diagnosis or provided the wrong treatment, medical malpractice insurance may provide you with protection against this claim.

Malpractice insurance is very important because a significant percentage of doctors, dentists, and optometrists will face lawsuits during the course of their careers. In fact, 34% of all physicians have been sued.

Even if you did not intend to hurt the patient, you could still face a significant lawsuit due to negligence. Medical malpractice insurance can provide you with protection against catastrophic financial losses.

Whether you’re a primary care physician or a surgeon, it’s essential to have clear answers to “how does dental malpractice insurance work?” and “how does medical malpractice insurance work?”.

What does Malpractice Insurance cover?

Like small business health insurance, malpractice insurance varies in terms of its coverage. You should always take a look at the details of your policy before filing a claim, but there are several common examples of incidents that malpractice insurance may cover.

Some of the most common examples include:

• Surgery performed on the wrong location
• Missed diagnosis
• Surgical mistakes
• Medication mistakes
• Injuries related to childbirth
• Other claims related to medical wrongdoing

Before you purchase medical malpractice insurance, be sure to review the coverage offered and determine whether you’re comfortable with how well you’re going to be protected.

What doesn’t Malpractice Insurance cover?

If you or someone at your medical practice office is involved in illegal behavior such as theft, sexual improprieties, or fraud, medical malpractice insurance will not cover these types of suits. In general, medical malpractice, or medical liability insurance, pertains to suits for medical reasons.

Keep in mind that this article is for general information and should not be relied upon for legal advice. eHealth sells group health insurance policies that can cover the employees of your small medical practice with health insurance, but we do not sell malpractice insurance. Please consult your legal advisor to better understand your specific situation.

What is the Malpractice Insurance limit?

Just like other types of insurance policies, there is typically a limit to the financial protection provided by a medical malpractice insurance policy. You need to take a look at the average number and size of claims made in your specialty.

For example, surgeons might be more prone to a medical malpractice claim than a primary care physician. While some medical malpractice policies only provide $100,000 in protection, you might be able to find a medical malpractice insurance policy that provides you with protection of up to $3 million or even more.

You need to understand that there are typically two separate limits associated with your medical malpractice insurance policy. A lower limit typically represents the maximum amount of money the insurance company will pay in a single year. Then, there is typically a second number that represents the limit of the amount of money that an insurance company will pay during the life of the policy.

Understand that the level of your protection will be commensurate with the premium. If you are willing to pay greater small business insurance premiums, you may be able to purchase additional protection.

Before making a purchase, you may want to reach out to a licensed insurance agent who can help you determine what level of protection you need based on your field.

Benefits of Malpractice Insurance

It doesn’t matter how talented every physician or licensed medical professional within your small medical practice or small business may be —you are still at risk for a lawsuit from a patient. Even if it turns out that your practice isn’t at fault, you will still accrue legal costs, which medical malpractice insurance will usually help cover.

Medical malpractice insurance offers several benefits for small businesses beyond covering legal costs in the event of a lawsuit from a patient. Firstly, it provides financial protection by covering legal fees, court costs, and settlements or judgments resulting from malpractice claims. This can help prevent significant financial losses that could otherwise threaten the viability of the business. Additionally, medical malpractice insurance often includes coverage for disciplinary proceedings and regulatory investigations, which can arise even when no lawsuit is filed. Moreover, having malpractice insurance can enhance the reputation and credibility of the business, as it demonstrates a commitment to high standards of care and professionalism. It also provides peace of mind to healthcare providers, allowing them to focus on delivering quality care without worrying about the potential financial consequences of malpractice claims. Overall, investing in medical malpractice insurance is essential for small medical practices and businesses to protect their assets, reputation, and long-term success.

How to get Medical Malpractice Insurance

You need to find the right malpractice insurance policy to meet your needs. Similar to other types of insurance, you may want to reach out to a marketplace that can help you figure out what policy is right for your needs.

If you are employed by a local hospital, you may get malpractice insurance through your employer. Similar to health insurance, you should talk to your employer to see what plans are available to you. Then, you can pick the right one to meet your needs.

If you are a solo practitioner or if you are a partner in a larger practice, then you typically will need to purchase malpractice insurance on your own.

Choosing the right policy

 Selecting the appropriate health insurance policy is a crucial decision that requires careful consideration. With various options available, it’s essential to assess your specific needs and preferences to find the plan that best fits your requirements. Consider factors such as coverage, cost, network providers, and additional benefits to determine which policy aligns with your healthcare needs and budget.

 Cost considerations

 When choosing a health insurance policy, it’s essential to evaluate the various costs associated with each plan. These costs may include monthly premiums, deductibles, copayments, coinsurance, and out-of-pocket maximums. Assessing these expenses can help you determine the overall affordability of the plan and ensure that it aligns with your budget. Additionally, consider factors such as coverage limits and restrictions, as well as any potential penalties for late payments or non-compliance with plan requirements.

 Assessing industry-specific risks

 Industry-specific risks can significantly impact the type of health insurance policy that best suits your needs. For example, certain professions may have higher risks of workplace injuries or exposure to hazardous conditions, necessitating comprehensive coverage for medical treatment and rehabilitation. Additionally, consider factors such as employee turnover rates, workforce demographics, and regulatory compliance requirements when assessing industry-specific risks. By understanding these factors, you can better tailor your health insurance policy to address the unique challenges and pitfalls associated with your industry.

Optimizing coverage levels

 Ensuring adequate coverage levels is essential to protect yourself and your employees from unexpected healthcare expenses. Evaluate your healthcare needs and consider factors such as age, pre-existing conditions, and anticipated medical expenses when determining the appropriate coverage levels for your policy. Additionally, review the coverage options available under each plan, such as preventive care, prescription drug coverage, and mental health services, to ensure comprehensive coverage for your healthcare needs. By optimizing coverage levels, you can provide peace of mind and financial security for yourself and your employees in the event of illness or injury.

FAQs about Malpractice Insurance for small businesses

Is Medical Malpractice Insurance mandatory for small businesses in the medical field?

Medical liability insurance may not be mandatory for you to carry, but each state has different laws, so make sure you understand the laws regarding insurance where you live.

Some medical businesses have a malpractice insurance policy in place for their entire business, and individual medical professionals will not have to get their own coverage in such a case. It’s important that all your employees understand exactly how they are covered. For example, if a physician leaves the group of physicians or small office he or she was covered with, then coverage will likely end under that policy.

Considering the risk associated with medical malpractice, it’s important that everyone who has liability is covered, so providing clear information about your small business (and whether or not you have a policy that covers anyone working at your office) is key.

What other types of insurance do medical practices need?

There are many types of insurance out there, and it can be confusing deciding which insurance policies your small business should have. To name a few that you may be looking at:

• Health insurance
• Malpractice insurance
• Liability insurance
• Life insurance

The list of insurance types for your business could go on and on, which might make it hard to decide what you need. Let’s look a little more into what malpractice insurance offers you, and why you may want to purchase it for your small medical office.

Some insurance, like health insurance, is more widely understood and accepted as being necessary. Even though you may not have to offer health insurance, depending on how many people are employed by your small business, you may choose to offer health insurance. As a small business in the health-care industry, you probably deal with health insurance claims and coverage issues every day, so you know how important it is for individuals to have good health insurance that provides them with access to quality health care.