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What Does Medical Malpractice Insurance Cover?

Gallagher Healthcare :: Industry Insights
By Gallagher Healthcare | 10/24/2018
Medical Doctor in a Hospital

Many professionals have liability insurance to cover against any claims made from allegations of negligence. However, medical professionals require a separate class of insurance known as medical malpractice coverage, since their practices are especially subject to risk and since claims in this field can be substantial.

What Does Medical Malpractice Insurance Cover?

Medical malpractice coverage is for legal claims arising from allegations of medical negligence and malpractice. This insurance helps to cover defense fees, expert witness costs, legal fees and settlement costs. Many insurance policies for medical malpractice cover professional work as a physician or other medical professional but may also cover your work on peer review panels. If such a decision results in a lawsuit, malpractice coverage will protect you up to the policy limit.

Two Types of Insurance: What Does Malpractice Insurance Cover?

Medical malpractice can be either occurrence-based or claims-made. The difference between the two types is as follows:

  • Claims-Made: Claims-made insurance policies cover medical professionals for incidents which occurred when the policy was in place. The claim must also first be reported when the policy is in place. If a physician is covered between 2015 and 2025, for example, and a legal claim is filed in 2018 related to an incident which occurred in 2017, the physician is covered. Incidents and claims made outside the policy period are not included, and additional insurance products may need to be considered. Nose coverage can protect physicians for incidents that occur before a specific policy is in place, and tail coverage protects them for claims filed after the policy is no longer in place when the incident allegedly occurred while the policy was in place.
  • Occurrence-Based: In contrast, occurrence-based medical malpractice insurance policies provide coverage for incidents that occurred when the policy was placed. This is regardless of when a claim is first made. Even if a claim is made after the insurance is lapsed or ended, the physician is still covered, as long as the incident on which the claim is made occurred when the policy was in place.

Exclusions: What Does Legal Malpractice Insurance Cover and Not Cover?

Medical malpractice insurance covers physicians for claims resulting from allegations of wrong site surgery, misdiagnosis, surgical errors, medication errors, childbirth-related injuries and other claims of wrongdoing. However, there are some exceptions. This insurance will typically not cover claims of sexual misconduct or illegal acts. Also, the policy may be void if a physician materially misrepresents facts when applying for a policy.

When selecting medical malpractice insurance, it is also essential to choose the right policy limits. Some states, medical specialties and cities are known for high claims and physicians need to ensure their coverage is enough for a rigorous defense and any possible settlement. For medical malpractice coverage, policy limits may include aggregate limits or per-occurrence coverage. Per-occurrence limits mean an insurer will pay up to that limit for a single claim. An aggregate limit refers to the total sum an insurer will pay for a specific policy period, regardless of how many claims are made.

Contact Gallagher Healthcare to Learn More About Medical Malpractice Insurance

Gallagher Healthcare can help you learn more about medical malpractice insurance. As one of the largest advisors in the nation for physicians, hospitals, HMOs and other organizations, we have professionals who can bring you insurance solutions from multiple providers, so you get the right fit and a competitive price.

Request a quote to see for yourself the difference Gallagher Healthcare can make.

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