If you’re in the medical field, you may have heard of malpractice insurance. But what exactly is this type of insurance? Medical malpractice insurance, also known as medical professional liability insurance, is a form of professional liability insurance that covers physicians and other health care professionals from liability resulting from malpractices. Because malpractice can occur during diagnosis or treatment, most healthcare professionals will need malpractice insurance at some point in their careers.
If you’re just starting your nursing career, you may feel that you won’t need to purchase malpractice insurance or know more about it. Maybe your insurance is covered by your company, which has already selected the insurer and negotiated the policy terms. However, your career could be at risk if you are ever caught in a malpractice action, even if your company provides coverage.
Though physicians are sued more often than nurses, this has recently changed. Healthcare institutions are now recognizing the individual contributions of all staff, not only physicians. Today, personal accountability for nurses is recognized, including the risk of being sued for malpractice based on their own actions. If you are sued as a result of malpractice, this type of insurance can assist with your legal expenses, judgments, settlements, or lost wages if you are asked to attend a trial in court.
The majority of nurses who only rely on employment coverage may have never viewed the policy or inquired about the range of coverage. Nurses are often surprised to discover that their insurance has loopholes and doesn’t fully cover all of their risks. For example, if the event that led to the lawsuit goes beyond the scope of your job title or is covered by a policy exclusion, your company may refuse to defend you. If you submit a claim after you quit or were fired, the employer’s policy may not cover you.
Here are a few helpful tips before purchasing malpractice insurance:
- Know The Types Of Policies Available
Professional liability insurance has two types: claims-made and occurrence. The vast majority of policies offered in today’s insurance market are claims-made. But, some insurance companies do provide occurrence policies.
- Claims-Made – A claims-made policy will only offer coverage if it is in effect at the time of the occurrence and when the lawsuit was filed. In this way, this implies that coverage is extended for a considerable period to guarantee sufficient protection, as a large amount of time may elapse between when an incident occurs and when a claim is filed. For this reason, some claims-made agreements include a “tail” term of coverage that continues coverage for a specific length of time after a policy expires.
- Occurrence – Occurrence plans are different from claims-made policies in that they cover any claim for an incident that occurred during the term of coverage, even if the claim is submitted after the policy has ended. Generally, occurrence policy does not require tail coverage, however, this type of insurance is most likely more expensive and less commonly offered by insurance providers.
Nursing malpractice insurance is based mainly on occurrence. It’s important to know what kind of insurance you have, especially if you’re switching companies. When you convert from an occurrence-based policy to a claims-made policy, there is no coverage gap. However, if you convert from a claims-based to an occurrence-based policy, you would no longer be covered for occurrences that happened but were not reported while the claims-based policy was in effect. So, you must obtain tail coverage to offset the risks associated with that gap time.
- Understand Further Details Of Your Policy
It is also crucial to fully understand the details of your malpractice insurance. This would include legal expenses, arbitration and settlement fees, medical and compensatory damages, which are common costs covered by medical malpractice insurance policies. In addition to this, medical malpractice insurance often does not cover liabilities arising from criminal or sexual behavior. It is important to understand what your chosen malpractice insurance policy expressly covers and what it does not cover to ensure that you are sufficiently protected.
- Know Your Extent Of Coverage
Also, it’s essential to know how much coverage you have for each event and any claims that may also be brought against you. While some states may require minimum amounts of coverage for the amount for every claim and the total of all claims that may be made, it is important to discuss the need for extended coverage above these minimums with a professional malpractice insurance broker to confirm that your assets are protected. protected. Since malpractice claims may take your professional assets. If you have a $1 million professional liability coverage and a $5 million judgment is entered against you, the plaintiff can go after your assets. As a result, it’s important that you’re properly insured. It’s also useful to know that, fortunately, the price per million drops as your coverage grows.
- Work With An Experienced Broker
Is the cost a competitive value given the policy’s evaluated features? This is where a malpractice insurance broker can help because obtaining as many quotations as possible may give you a sense of how competitive a certain price is. Brokers can also advise on possible ways to save money on premiums with a certain provider; however, this may come at the sacrifice of coverage benefits.
For instance, defense expenses outside the limitations will be significantly higher than defense costs inside the limits. However, if a provider carries a $1,000,000 per occurrence and $3,000,000 aggregate limit of liability, the cost reductions may outweigh the defense expenses. It all depends on the individual provider and how much they are willing to take in exchange for a higher premium.
When purchasing malpractice insurance, it’s easy to overlook the intricacies, but they’re important. When you start looking around, you’ll discover that the market is quite competitive in terms of pricing. All the more reason to learn the ins and outs of insurance, delve in deep, and work with a professional and experienced insurance broker.
As with any purchase, it is important to be a well-informed buyer. While there are always other circumstances to evaluate when obtaining a medical malpractice policy, this article is a basic guide to guarantee that every important policy feature is properly considered.