Malpractice Insurance Policy Information
Malpractice Insurance. A type of insurance purchased by health care professionals (and sometimes by other types of professionals, such as lawyers). It protects such professionals against potential negligence claims made by their patients and/or employers.
malpractice insurance covers bodily injury or property damage as well as liability for personal injury such as mental anguish. This includes the costs of defense and cost containment expenses.
Malpractice insurance protects your company from negligence claims with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
How Much Does Malpractice Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 Malpractice Insurance policy for small professional businesses ranges from $67 to $79 per month based on location, size, payroll, sales and experience.
Malpractice Insurance Policy Basics
malpractice insurance comes in several basic forms:
- An occurrence policy provides coverage for alleged incidents (injuries) that happened during the policy year regardless of when the claim gets reported to the carrier. The claim can be reported at any time in the future, even if the policy has cancelled. The occurrence policy provides a separate coverage limit for each year the policy is effective. Occurrence policies offer a steady base premium that does not increase as the policy matures.
- With a claims-made policy, an incident must happen and be reported to the insurance company while the policy is effective. As can be seen, this requires that coverage must extend for a significant period of time to provide adequate protection since a considerable amount of time may elapse between when an incident may have occurred and when a claim is made.
- Tail insurance refers to a policy that the insured can purchase when he discontinues his claims-made policy. Tail coverage requires that the policy holder pay an additional premium. The issue, however, is that the additional premium coverage can be extremely expensive - sometimes 150 or even 200 percent of the price of a mature claims-made policy, depending on the medical specialty and the location.
Is Malpractice Insurance Mandatory?
There is no legal requirement to have medical malpractice insurance but it's important to protect yourself and your business against events you cannot foresee. Also, in today's society, people are increasingly ready to bring a claim against you if they feel dissatisfied - whether or not you are actually at fault. Claims can run into many thousands if not millions of dollars and having malpractice insurance could be the difference between a business being able to survive a claim or not.
Buying Medical Malpractice Insurance
When shopping for a medical malpractice liability insurance policy, most physicians focus on premium costs. But physicians shopping for a malpractice policy should also focus on getting the right coverage limits. A coverage limit is a provision in a policy under which the insurance company says that it will only pay for losses sustained by the policyholder up to a certain dollar amount. If limits are too low, the physician is needlessly exposed to personal liability. Too high, and the physician is paying for more coverage than needed.
Malpractice Insurance: Costs and Components
Claims-made policies tend to be less costlier than occurrence policies because of the smaller insurance company time exposure to claims. Some other factors that determine how much the policy costs include:
- Physician or provider specialty (costs vary based upon exposure to risk).
- Type of coverage, occurrence or claims made.
- Limits of liability (aggregate amounts, deductibles and managed care requirements).
- Location of practice (costs vary widely by state, county and city).
- Loss history.
What Does Malpractice Insurance Cover?
malpractice insurance covers several expenses involved in defending and settling the malpractice suit; it also pays the damages if you are found liable. The covered costs include: court costs, attorneys' fees, settlement costs, arbitration costs, and compensatory damages and medical damages.
Medical malpractice will usually not cover liability arising from criminal acts, sexual misconduct or alteration of medical records. Other typical exclusions are for: punitive damages and specialized procedures (e.g., radial keratotomy) for which coverage may be "bought back" in return for additional premium.
Handling Malpractice Claims
In most cases, in order for your insurance policy to provide you with coverage, you should notify the insurance company as soon as reasonably possible of the problem. If you do actually become involved in a claim or lawsuit, for example, you receive a summons and complaint, before coverage is activated, you must notify the insurance company right away. Always follow up an oral notice in writing.
Why You Need Malpractice Insurance
Even the most competent professional can make a mistake and should protect against that possibility. Defending a malpractice lawsuit is often expensive even when the defendant wins. Health care professionals win most malpractice lawsuits, but the legal system rarely allows for the recovery of expenses by the winner. Since the cost of defense is high and a loss can be devastating, this insurance product is essential to every practice.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Additional Resources For Medical Insurance
Discover small business insurance for medical and dental professionals. Medical malpractice insurance is a type of professional liability that protects health care professionals from liability causing in bodily injury, medical expenses and property damage.
- Ambulatory Surgical Center
- Art Therapy
- Assisted Living Facilities
- Dental Lab
- Dental Office
- Diagnostic Imaging Centers
- Healthcare Facilities
- Home Medical Equipment Dealers
- Marriage & Family Therapy
- Medical Laboratories
- Medical Marijuana Dispensary
- Medical Practice
- Mental Health Counseling
- Occupational Therapy
- Physicians Office
- Skilled Nursing Facilities
- Speech Therapy
- Substance Abuse Counseling
Health care providers are the most trusted individuals in our society. Ironically, they are the same ones who can do the greatest harm. They actually have the right to invade our bodies with knives and to poison us with chemicals - all in the name of health care and with the goal of relieving our symptoms and hopefully bringing about a cure.
While the actions of these professionals normally benefit us, insurance coverage must be available for the times when mistakes happen and things go wrong. These professionals and their facilities have extensive property exposures that are becoming more and more intricate and whose values are increasing exponentially.
The 'one size fits all' approach that once could have applied to insurance for health care providers and their facilities no longer applies.
Professional liability offers protection against claims of malpractice for all sums that the medical professional becomes legally obligated to pay as damages because of rendering or failing to render professional services.
Professional and medical malpractice exposures are the most expensive and difficult of all exposures for health care providers. The commercial general liability policy excludes these exposures so separate coverage is needed. Most professional liability policies are written on a claims-made basis and, as a result, tail coverage and retroactive dates are important coverage issues to be aware of when evaluating the insured’s coverage needs and comparing coverages.
The coverage provided is often called medical malpractice. For decades, many involved in the health care field and insurance companies that provide insurance coverage to providers have stated that malpractice lawsuits have created an ongoing crisis of restricting insurance availability, due to loss of insurance companies that write the coverage and significant rate increases.
As a result, state legislatures have taken the following actions to address the situation:
Imposed a dollar limitation of liability for malpractice suits.
Modified statutes of limitation to limit the number of years that a suit may be brought against a physician following a negligent act.
Modified when the statute of limitations takes effect. An example is beginning from a negligent act's occurrence rather than from its discovery.
Passed laws to modify tort law procedures and doctrines that relate to malpractice.
Because of differences in law by state it is important to know the states in which the covered health care providers are licensed and regularly practice. Some health care providers may practice in multiple states because of their particular specialty, their reputation or the demand for their services. Some hospitals may have ownership in facilities or provide services to patients that are outside of their main location state.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Physicians and Surgeons Floater, Valuable Papers and Records, General Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Cyber Liability, Employment-related Practices, Business Automobile Liability and Physical Damage and Stop Gap Liability.