Malpractice insurance is a very common form of professional liability coverage that is most commonly purchased and maintained by health care providers. Malpractice insurance is primarily designed to protect against malpractice, an act in a profession that causes damages to others. A doctor acting in such a way that harms a patient is considered malpractice, especially if certain codes of ethics, conduct or medical practice are violated. Prescribing a medication for an extended period of time before reversing the diagnosis years later would be an example of malpractice.
While there are literally thousands of medical malpractice cases each year, not every one is a winning case. In many occasions, doctors trudge through years of costly litigation and court costs to find that they were, in fact, not at fault. Anyone who has any understanding of the legal system knows that you don't have to lose in court to lose from going to court. Often, going to court is more expensive than the final outcome or decision, and medical malpractice insurance helps protect against this risk.
Who Uses Medical Malpractice Insurance Carriers?
Rarely do people consider nurses, family doctors, or dentists to be at a high-risk of lawsuits or legal battles, but actually, these professions demand nearly as much insurance as surgeons or specialists. Medical malpractice insurance is usually held by almost everyone with any contact with patients, since any and all contact can result in legal trouble. Those who work in administration, billing, or other facets of the business end of health care delivery are not exposed to patients in a medical setting, and are not traditionally individually insured for medical malpractice.
Malpractice insurance is incorporated into the health care field from a doctor's very first foray into any medical profession. Even interns or student staff at university hospitals are insured, as are those who donate their expertise and time to not for profit clinics. In general, the risk of litigation is standard from one area of delivery to the next, with free medical clinics being the target of lawsuits as frequently as for profit hospitals.
How Much Malpractice Insurance is Necessary?
Each state through its state medical board decides how much medical malpractice insurance is required by law for each profession. Nurses, for example, may require $1 million in coverage while surgeons are required to have $3 million or more. Unfortunately, such policies are some of the most expensive types of any professional insurance, since one accident in the medical field can lead to fatalities, lawsuits, and eventually millions of dollars in damages.
Also, because gauging the risk of such an accident is so difficult, there are fewer medical malpractice insurers than exist in other industries. Most malpractice happenings are the result of accidents, misunderstandings, or simple errors, though the outcomes can and do reach into millions of dollars in damages charged against the doctor, and eventually, the insurance company.
A policy is typically sold with a per occurrence and annual aggregate total. Common combinations are $1 million/$6 million, $1 million/$3 million, and $500,000/$3million policies for less risky medical occupations while surgeons may purchase policies in the tens of millions.
The policy price is largely dependent on the duties of the professional seeking insurance. A $1,000,000 policy for a nurse costs as little as $100 per year with experience. A nurse practitioner with similar experience would pay $1500 a year. The difference between the two is largely the interaction between nurses, nurse practitioners and patients as well as the fact that nurse practitioners, unlike nurses, can prescribe medication. The prescription of medication brings about several times more risk for the insurance company.
Being Smart About Insurance
Professionals earn more per year than others because they provide services that others need, and many times because they accept some amount of personal liability for their trade. In the medical field, where salaries are the highest, increasing malpractice insurance and eating the cost in premiums looks like a wise gamble. For less than a few thousand dollars per year, doctors, nurses, surgeons, dentists and everyone in between, can be protected against millions of dollars of costly legal battles, and protect their quality of life. Remember, it isn't just the bad doctors and professional who are sued, and winning in court doesn't mean you haven't lost in the pocketbook.