Medical professionals provide life-saving treatments every day. However, sometimes those interventions can lead to civil lawsuits. A quarter-million Americans died because of medical malpractice in 2020.

Not every death leads to a lawsuit. But in the event of litigation, medical malpractice insurance can protect doctors from bankruptcy. In this article, we’ll explain the basics of professional liability insurance.

What Is Medical Malpractice Insurance?

Malpractice insurance is a special type of insurance for physicians, as the policies offset liability. They protect doctors when a treatment injures or kills a patient.

Most states mandate medical malpractice insurance coverage. They also require medical systems like hospitals to carry this form of insurance for doctors. The policies are often paid through monthly premiums or as a lump-sum annual fee.

The insurance is available through traditional insurance carriers like Blue Cross Blue Shield, while some companies specialize in medical malpractice insurance.

Another form of protection from liability comes from a medical risk retention group. These state medical societies are a form of self-insurance. The members agree to collectively pay for costs related to defending cases and paying judgments.

Any type of medical doctor or medical professional may need individual or group coverage. Dentists, psychologists, pharmacists, nurses, optometrists, and others can use the coverage. Surgeons represent the highest percentage of cases that use medical insurance.

What Does the Insurance Cover?

Sometimes medical insurance protects doctors following a legitimate medical error. In other cases, the coverage protects medical professionals from fraudulent claims.

Doctors are often seen as an easy target for lawsuits. This is because plaintiffs see doctors as being able to pay out large court settlements.

Insurance for medical professionals covers a range of expenses related to malpractice suits.

Attorney and Court Costs

Even a baseless malpractice claim will probably make it to court or mediation. Attorneys can charge hundreds of dollars per hour for their services. Doctors would have to pay those fees out of pocket if they do not have malpractice insurance.

Court filings are also expensive. Extra fees could include expert witness testimony and court reporter fees.

Arbitration Costs

Arbitration is a negotiation process that is done in private. It is often done between two or more concerned parties.

Arbitration also requires legal fees. Judges are often hired to act as arbitrators, and they charge high fees.

Arbitration can lead to lower court fees and a faster resolution to legal disputes. Medical malpractice insurance typically covers the cost of arbitration.

Settlement Costs

Attorneys may agree to settlements for many reasons. Sometimes settling a case is the better option than going to court. Ultimately, court trials take doctors away from their patients.

The attorney or attorneys who represent your insurance company may see the settlement as the better option. Settlement costs are usually covered by medical malpractice coverage.

Punitive and Compensatory Damages

If a judge rules in favor of the plaintiff, a court may find a doctor liable for damages. Judges often award monetary damages to settle cases.

Judges assess compensatory damages based on the level of harm done to a defendant. Following the death of a patient, one or more family members may seek damages. The damages often equal what the deceased patient would have earned over the rest of his or her lifetime.

Judges can levy punitive damages besides compensatory damages. Punitive damages are often reserved for cases where a judge sees an injury or death as egregious.

As long as criminal conduct is not involved, punitive damages may be covered.

Medical Damages

Some plaintiffs may seek medical damages, and these costs are related to the medical procedure. Further medical treatments may be needed because of a botched procedure. In that case, malpractice insurance may cover medical damages.

What Is Not Covered by the Insurance?

Medical malpractice insurance does not cover doctors who engage in sexual harassment and other forms of sexual misconduct. Liability resulting from criminal acts is not covered by malpractice either. Doctors who alter medical records may lose protection under malpractice insurance. Malpractice insurance protects doctors who perform procedures ethically.

Other Malpractice Insurance Considerations

Medical malpractice insurance covers certain types of situations. Any hospital, private practice, or group practice will need to look at several other types of insurance, too.

Cyber liability protection is one example. If ransomware hits your company, you will need a special type of insurance to address loss because of those events.

Failure to fulfill regulations may lead to the need for a unique form of insurance. Some forms of medical malpractice insurance can add provisions to cover these situations.

When shopping around for coverage, be sure to ask what all is covered. If there are certain protections that you would like added, ask the insurance carrier if those protections can be added.

Find the Right Malpractice Insurance for Your Medical Practice

Medical malpractice insurance allows doctors to perform treatments without the worry of lawsuits. The form of insurance is robust enough to cover pretty much any type of liability issue tied to performing medical treatments.

If you are shopping around for medical malpractice insurance, you want to work with a company that has extensive experience. Central Jersey Insurance Associates has been in business for over 50 years. To schedule a consultation with one of our agents, please contact our team today.