How Medical Malpractice Insurance Works

Every doctor needs trusting patients, experience, knowledge and of course a medical degree. But there’s one other thing doctors need to back up all those other elements: Medical Malpractice Insurance. It’s crucial, and here’s why.

​Medical malpractice insurance is a service where another company provides a guarantee of compensation for certain losses like death, illness, and damage in return for the payment of a premium from the medical professional. If someone sues a physician because of medical malpractice, this is where the money will come. If the doctor does not have insurance for medical malpractice they can be held personally responsible for those situations.

Whether or not a doctor actually needs to have medical malpractice insurance is largely dependent on where they will practice medicine. Each state has different requirements for your coverage so it’s important to work with an insurance agency that is familar and well-versed in the requirements for your location.

A physician can have many types of malpractice insurance policies at any given time. The difference between different types of malpractice insurance is because they may offer coverage for different situations.

A Claims-Made Policy

Here is a policy that provides coverage when a claim went against the insured during the period of the plan. It doesn’t matter when the wrongful act happened. The claims-made policy will only cover what happened while the policy is in effect. The premium may increase for five years until it is considered “mature”.

Occurence-Based Policy

The occurrence-based policy is different from the claims-made policy because the occurrence-based policy provides protection for a doctor from covered incidents that occur during the period of the plan. If you cancel the policy but the incident happened before the cancellation, it is still under coverage.

Tail Coverage

Tail coverage will extend the endorsement of the reporting period. It allows insured doctors to continue the coverage even after the termination or cancellation of a policy that is made by claims.

Prior Acts

Here is a type of claims-made liability policy that does not contain a retroactive date. It covers claims that may arise from actions that happened at any time before the policy’s inception date regardless of how far in the past the event happened. It is similar to tail coverage that depends on the insurance company that the physician works with and the kind of policy that they have in place.

At Professional Insurance Plans we specialize in helping medical professionals get the correct and appropriate insurance protection they need and we’ve been helping doctors throughout the country with malpractice insurance for decades. To learn more about how we can help you please contact our agency at 1-800-783-7086