What Is and Isn’t Covered by Malpractice Insurance?

As a healthcare practitioner, an owner of a medical practice or a medical staffing company, you’re likely well aware of the harm that results from claims of medical malpractice. If you’re considering obtaining a malpractice insurance policy, or are confused why exactly your state has laws requiring it, chances are you’re wondering, “What does malpractice insurance cover?”

In short, medical malpractice coverage helps protect you from claims of professional negligence or inability to provide quality care resulting in physical, mental, or other economic damages. Keep reading to learn more about the types of claims a medical malpractice policy will protect you from and what sort of financial coverage you’ll be offered from an insurance carrier.

Scope of Malpractice Insurance Coverage

Malpractice insurance is a form of professional liability. When it comes to medical professionals, malpractice policies fall into two categories: occurrence based and claims-made.

• Occurrence based policy – Offers coverage for any incident that occurs during the policy term, no matter when the claim is made.
• Claims-made policy – Offers coverage for incidents that occur during the policy period only if the claim is also filed during the same term.

When speaking to the journal, Medical Economics, attorney Diane Robben stressed the importance of scope of coverage and what isn’t included, such as “Cyber insurance coverage [and] whether the policy provides coverage for defense of licensure board complaints or governmental investigations.”

If you don’t know exactly what type of liability coverage you need, consult your insurance provider and they should guide you in how much and what types of coverage you need based on your specialty, location and workplace.

Protection Against Claims

Much like professional liability insurance, also known as errors and omissions insurance (E&O), which offers protection from personal injury and professional negligence, medical malpractice insurance does all that and more, extending the personal injury coverage to include claims of mental anguish.

Medical malpractice insurance covers the following areas, often catered to individual specialties of your clinical practice or at-home health care services:

• Medical accidents and errors – For any medical errors, bodily injury, or unexpected adverse reactions from patients receiving care.
• Improper treatment – Whether you failed to follow proper protocol, accidentally omitted steps in treatment, or were said to have done so when you didn’t.
• Inadequate supervision – Sometimes healthcare practitioners are faulted even though they weren’t responsible for the incident in question. Someone else’s misstep could be interpreted as your mistake, and you will need coverage either way as a medical professional.
• Negligent care – If your care was perceived as being less than anticipated or desired, you will need insurance coverage to redeem your reputation and avoid hefty legal expenses and defense costs.

Financial Coverage

Without proper liability coverage, you’ll be forced to pay defense costs out-of-pocket if someone files a medical malpractice claim against you, and the legal fees alone would drastically affect your financial situation, even if you know you are innocent. Most cases don’t make it to trial and result in a settlement, but that financial burden is even harder to bear. An insurance premium is a small price to pay when considering the alternative, especially if you have the option to choose a payment plan that fits your schedule.

Your medical malpractice insurance policy will offer financial coverage in the following ways:

• Attorney and court fees
• Arbitration costs
• Medical and compensatory damages
• Payouts and settlements
• HIPAA Violation Fines

For comparison, here is the average cost of handling a malpractice lawsuit in court, or settling in court with a payout:

• The average cost of defending a medical malpractice claim is $47,000, according to trial attorneys Gilman and Bedigian
• On average, a malpractice payout costs $353,000, according to CBS News

What isn’t covered under malpractice insurance?

Each policy is different, so it’s vital to look at your particular one to see specifically what is covered and what is not covered.

Illegal Activities and Sexual Misconduct

Despite covering many areas of misconduct, a medical malpractice insurance policy does not cover inappropriate behavior, criminal acts, or alteration of medical records. Sexual misconduct is also usually not covered, nor are things like selling drugs from the medical facility. Ultimately, if you and your team are operating honestly and within the law, you will probably be ok with just standard insurance that protects you from malpractice.

Doctors Under the Influence

They do not cover physicians who are operating while on drugs or alcohol or who’ve neglected to take steps to ensure proper patient care, like administering the right amount of anesthesia for medical treatment.

Cyber Security

It doesn’t typically include help with cyber security, which is why you’ll need a separate cyber liability policy or you can find out if your provider can add on a cyber sub-limit to your policy for potential cyberattacks and data breaches concerning personal medical records. NOW Insurance medical professional liability policies come standard with a $25,000 sub-limit for HIPAA violation fines and penalties, however you might need more coverage than that depending on the size of your practice and how much data is collected and stored. You’ll need financial help with data restoration, forensic investigation, communication to patients and other necessary aspects of handling a data breach. A cyber liability policy provides additional coverage. NOW Insurance can add on a $100,000 cyber sub-limit to your policy. Cyber liability has become more relevant for individual practitioners due to the rise in telehealth and telemedicine adoption due to the pandemic.

Malpractice Coverage from NOW Insurance

With 20 years of experience covering professionals in the healthcare industry, NOW Insurance is a trusted provider of malpractice professional liability coverage. Beyond offering fast and affordable options for all types of healthcare practitioners, NOW Insurance company also provides policies for medical staffers. We advise that you look for an insurance provider that offers:

• Specializations in all subsets of healthcare providers
• Is familiar with the nature of staffing contracts
• Will defend the provider and staffing company nationwide
• Transparent regarding policy limits and staffing agency insurance costs

Protection Moving Forward

Now that you have an answer to the question, “What is malpractice insurance?” and know where to get malpractice insurance, making a decision and integrating malpractice professional liability coverage should be straightforward and hassle-free.

The risk of losing your personal assets, dealing with a large financial burden and economic damages, and harming your reputation aren’t worth it as a medical professional when compared to all the time, energy, and money you’ll save with medical malpractice insurance. With the experienced team at NOW Insurance, you’ll be able to create a customized plan to get the best coverage possible in the least amount of time, ensuring that you’re protected from the risks inherent to your profession.

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