The Differences Between Medical Malpractice Insurance Deductibles



There are many complexities associated with medical malpractice insurance, such as what type of coverage is best for your practice, whether or not you need tail coverage, and more. One of the most confusing elements of malpractice insurance is often the deductible. The more you know about this aspect of your coverage, the more confident you’ll be knowing that it meets your exact needs.

What You Don’t Know Could Hurt You

Many doctors don’t realize that a deductible is far more than a dollar amount. There are several policies that don’t require a deductible, and it’s important to understand the differences. Deductibles range from anywhere from $2,500 to $10,000 or higher. A high deductible will usually require a letter of credit from your bank.

How They Differ

When deciding on the type of coverage you want for your practice, think carefully about the deductible. For example, consider when you would actually have to pay it. Some policies offer a type of deductible known as “indemnity only” and others offer a deductible known as “indemnity and expense.” Here’s the difference:

  • If you have a policy with an indemnity only deductible, you only pay it if an indemnity payment is made for you.
  • If you have an indemnity and expense deductible, you will have to pay your deductible whenever any kinds of expenses are incurred while defending you from the claim — whether or not an indemnity payment is required.

Let’s say you face a malpractice claim and you have a $7,500 indemnity only deductible. It could cost $200,000 to defend you against the claim, but you won’t have to pay any expenses as long as no indemnity has to be paid. If you have an indemnity and expense deductible of $7,500, you’ll have to pay that amount toward any expenses associated with defending the claim.

It’s Not Always Simple

You might assume that your malpractice insurance deductible is similar to the one you have on your car or home policy. Something happens, you file a claim, and you cut a check for your deductible. However, for many physicians, the sudden demand for a large deductible check can do serious damage to a practice. It can cause a great deal of stress and lead to substantial disruption to your operations.

Be as prepared as possible should the need arise for you to pay a deductible. With the right policy, you can avoid the shock and surprise of a major deductible.

Gallagher Healthcare has more than 30 years of experience helping physicians with their insurance needs. No matter what type of deductible your policy carries, we’ll work with you to make sure it’s manageable enough so that your practice will continue to run smoothly if you’re faced with a claim.

Malpractice insurance can be extremely confusing, and finding the right policy can be an incredibly time-consuming task. If you’d rather not deal with the hassle and you want to instead focus on what you do best — caring for your patients — turn to the experts with Gallagher Healthcare.


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