Medical Malpractice Insurance: Coverage & How It Works

Medical malpractice insurance companies provide coverage to healthcare providers and facilities against liability claims from patients, arising from failure to meet the standard of care.

How it Works

• The insurance company covers financial expenses incurred when defending a claim, including investigation, attorney fees, expert witnesses and supplemental costs. The insurance company pays out benefits awarded by a jury or a negotiated settlement between the parties.

Types of Medical Malpractice Insurance

• There are three types of medical malpractice insurance: Hospital Professional Liability, Physician Professional Liability and Allied Healthcare Professional Liability. Some states do not require professionals to purchase medical malpractice insurance. Check local state regulations to determine if this coverage is required.

Benefits

• Medical malpractice insurance protects the personal assets of healthcare providers and facilities.

Advantages

• Some companies offer additional coverages and features such as Risk Management, Practice Management and consultants to help with the business aspects of practicing medicine.

Disadvantages

• Most healthcare providers are contracted, making this coverage an independent, and expensive, cost. Some companies only write policies in certain U.S. states.