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How Does Malpractice Insurance Work?

How Does Malpractice Insurance Work?

Medical malpractice insurance is a critical coverage for all types of medical professionals, from registered nurses to surgeons. In some cases, it’s mandatory—you may need a policy to get licensed in your state or get a job at a hospital or medical practice. But what makes it so important, and how exactly does malpractice insurance work? Keep reading to learn the basics of malpractice insurance, including what it covers, how it protects medical professionals, the different types of policies you can choose from, and who needs it.

What Is Medical Malpractice Insurance?

Malpractice insurance is a type of professional liability insurance designed for medical professionals. If a patient sues their healthcare provider for medical errors, malpractice insurance can help pay for lawsuit costs and other fees.

What Does Medical Liability Insurance Cover?

Medical malpractice insurance covers various medical negligence claims, including:

  1. Delayed or false diagnosis

  2. Surgical errors, like performing the wrong procedure or causing damage to surrounding tissue

  3. Failure to treat a medical issue

  4. Birth-related injuries

  5. Incorrect prescriptions or dosages

  6. Nerve damage, sinus perforations, or infections due to dental procedures

Once a patient files suit, malpractice insurance can help pay for lawyer fees, court costs, settlements, judgments, and expert witnesses. Without a policy, practitioners would have to use their personal assets to pay these costs out of pocket.

How Does Malpractice Insurance Protect Medical Providers?

A medical malpractice claim may seem unlikely, but no medical professional is immune. Mistakes happen, and a patient may file suit even if you don’t believe you were negligent. You may still end up paying thousands to defend yourself in a medical malpractice lawsuit that ultimately gets dismissed.

Malpractice insurance protects you by acting as a financial safety net during lawsuits, regardless of whether a patient wins or loses. Instead of draining your savings and retirement accounts to pay legal fees and hefty settlements, you can rely on your policy to cover costs.

Understanding the Different Types of Malpractice Insurance

When purchasing malpractice insurance for yourself or your employees, you have two options: occurrence or claims-made policies. Depending on the one you choose, you may need tail coverage to protect yourself after canceling your policy.

Agent man presentation and consulting car insurance detail to customer and waiting for his reply to finish

What Is Occurrence-Based Malpractice Insurance?

Occurrence-based malpractice insurance works by providing coverage for any claims occurring during your policy term, regardless of when they get reported. For example, you could buy a policy in 2011 and cancel it in 2021. If a patient filed a lawsuit in 2022, you would still receive coverage as long as the incident leading to the suit happened in the decade your policy was active.

What Is Claims-Made Malpractice Insurance?

Claims-made policies cover claims that occur and get reported during your policy period. For example, let’s say you had an active claims-made policy from 2015 to 2020. One patient filed a suit in 2018 for an incident that occurred the year prior. Your policy would have covered this claim because it happened and got reported while your coverage was still in place. However, if an incident occurred in 2020 but a patient waited to file suit until 2021, your policy wouldn’t cover the claim.

Claims-made coverage is often cheaper than occurrence coverage because it depends on when a claim is reported. With an occurrence-based policy, you don’t have to worry about buying extra coverage after you retire—your policy will keep covering claims reported after the policy expires.

What Is a Tail Malpractice Policy?

A tail policy covers claims reported after your claims-made policy expires by extending coverage indefinitely or for a specified period. It may seem unlikely that a patient would file a lawsuit several years after an incident, but tail coverage protects you just in case.

You may need to purchase tail coverage if you retire, leave one employer for another, or move states. However, you may be able to continue coverage from one insurance company to the next. If you plan to keep practicing but need to change insurers, see if they will retroactively provide coverage for the years your previous policy was active.

Who Needs Medical Malpractice Insurance?

Doctors aren’t the only healthcare professionals who need malpractice insurance. Anyone who provides direct care to a patient should consider malpractice insurance to protect their assets. These professionals may include nurses, physician assistants, nurse practitioners, physical therapists, dentists, oral surgeons, anesthesiologists, and other providers.

You may be covered under your employer’s policy if you work for a large healthcare facility or medical practice. However, many employers require high-risk staff to buy an additional policy. And in many cases, malpractice insurance isn’t just required by your employer—it’s required by law. Check your state’s laws to see if you have a minimum coverage requirement.

At Southpoint, dental malpractice insurance is our specialty. We can help you protect your financial future with an affordable policy.

Protect Your Financial Future With Help From Southpoint Insurance

You spent years developing the skills and knowledge to become a medical professional. Don’t let one unexpected lawsuit derail your career and threaten your financial future. If you want to protect your practice for years to come, turn to Southpoint Insurance.

Our agency has over 50 years of experience finding insurance solutions for clients in risky industries, including oral surgery and dentistry. We can assess your practice’s risks, recommend the right limit amount, and find competitive claims-made and occurrence-based quotes from the most reputable malpractice insurance companies. Our team also offers every other type of insurance you might need to protect your property, team, and digital risks. Get in touch today to learn more about our medical malpractice insurance options or request a quote.

Protect Your Risks With Dental Malpractice Insurance

Dental malpractice suits may seem unlikely, especially if you have excellent patient relationships. But you can’t predict when a routine procedure will go wrong, causing your patient to consult a dental malpractice lawyer. You need professional liability insurance to ensure a lawsuit doesn’t threaten your financial future.

At Southpoint Insurance, we specialize in medical malpractice insurance for dentists and oral surgeons. Our experienced team knows the ins and outs of dental malpractice insurance and can help you determine the policy type, limit amounts, and coverages you need to protect your practice. We work with the most trusted dental and oral surgeon insurance carriers to get you affordable rates without sacrificing coverage. Get in touch today to learn more about our dental malpractice insurance options or request a quote.

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