Insurance is often concerned with risk, or the potential for damages and harm that can occur in the future. While future risk is unpredictable, insurance professionals can evaluate potential risks by considering what types of medical malpractice cases have occurred previously in your specialty and your geographic area. For example, a doctor who owns their own OB-GYN practice may be at risk of more medical malpractice claims than a family physician.
How Risks Are Classified
To discuss risk more specifically, insurance professionals use risk classification to help divide risks into categories. Risk management classification for the healthcare industry can include classifications such as:
- Preferred risks. A physician or practice with a lower risk of filing a claim is a preferred risk. This person may work in a lower-risk specialty, for example, that is sued for malpractice less often than another. Preferred risks may be able to find a larger number of insurers willing to offer coverage and may be able to seek better rates.
- Standard risks. A standard risk is a physician or practice that is considered to be an average risk because they match the characteristics of the parties on whose risks the risk table was created. For physicians, this might be a doctor who does not have an unusual specialty or history of board actions.
- Substandard risks. A physician or practice more likely than average to file a claim is a substandard risk. For example, in the medical profession, OB-GYNs and surgeons, including orthopedic surgeons, are considered higher risk because they perform complex treatments that can lead to negative health outcomes and claims.
Classification of risk in insurance is largely based on the underwriting process, where risks are evaluated. Classification will determine the likelihood of getting coverage as well as premiums. Understanding your risk is important when applying for a policy since it helps you evaluate your challenges in getting a quote.
Other Risk Classifications
When we talk about risk, substandard, standard and preferred are the most common terms used. However, other terms are used, too, such as:
- Economic and non-economic risk. Malpractice cases can be filed seeing economic and non-economic compensation. Economic risks refer to types of risks that result in financial losses. An economic risk may be the loss of income after an injury, while loss of quality of life can be a non-economic risk.
- Quantifiable and non-quantifiable risk. Quantifiable risks are those that can be measured, while non-quantifiable risks are those that are not tangible.
- Particular and fundamental risks. Particular risks are those that affect a certain person or a company, while fundamental risks can affect a whole segment of a community or society. An allergic reaction to medicine, for example, may result in harm to one person, while a tainted batch of medicine can be a risk for a whole county.
- Static and dynamic risks. Dynamic risks occur due to unpredictable changes, often as a result of sweeping societal or legislative changes. Static risks remain the same, year after year.
Dealing With Risk in Medical Malpractice Insurance
As a physician or practice, learning how to manage and minimize risk with the right insurance options is crucial. To get professional support in selecting the right insurance, contact Gallagher Healthcare for a quote. Let us help you find better coverage solutions for your specific needs.
Whether you perform brain surgery or you treat kids, we can find an insurance plan that realistically assesses your risk factors and offers you a fair price. We provide free analysis and recommendations, because we know our clients are busy people. They know they can trust our judgment. Get in touch today to see how we can assist you.