By William Kanich, MD, JD, MagMutual Executive Chair
According to the American Medical Association, 31 percent of physicians have faced a medical malpractice lawsuit, with the number rising to 47 percent for doctors aged 55 or older.
Whether you’re a young physician starting in practice or a veteran physician who is reviewing the available options in the market, there are many considerations beyond price when purchasing malpractice insurance. Here are key points to consider about any prospective insurance carrier:
- Financial Strength
You should feel confident that your insurer can cover claims now and in the future. To assess the financial strength of an insurance provider, review ratings from AM Best. Look for insurers rated "A" or better, and observe whether their ratings have been rising, falling or remaining stable.
- Corporate Structure
Medical malpractice insurers typically come in two forms:
- Stock Companies: Owned by shareholders who receive profits.
- Mutual Companies: Owned by policyholders who may receive profits as dividends. Mutual companies often focus on long-term stability for their policyholders, while stock companies aim to satisfy stock market expectations. Both types of insurers generate income from policy premiums and investments, but stock companies can also raise funds through stock sales.
- Policy Type
There are two basic types of malpractice insurance policies:
- Claims-made Policies: Cover events that occur and are reported while the policy is in effect.
- Occurrence Policies: Cover events that occur during the policy period, regardless of when they are reported.
Most medical malpractice policies are claims-made. To protect against claims after your policy ends, you may need to purchase tail coverage, which extends coverage for events that occurred during the policy period but are reported later.
- Cost
Your premium depends largely on:
- Location: States with effective tort reform tend to have lower premiums.
- Specialty: Higher-risk specialties face higher premiums.
- Policy Limits and Type
- Risk History
Some insurers may have higher upfront premiums but offer dividends or extra benefits, so be sure to weigh these factors when determining the best value.
- Claims Handling Process
Facing a lawsuit can be stressful, so it’s important to understand how your insurer handles claims. Key questions to ask include:
- Who holds the consent to settle: you or the insurer?
- How involved will you be in key decisions?
- How does the insurer assess the merit of claims?
- What support will you receive during the process?
Review the insurer’s trial outcome statistics and relationships with expert attorneys to help you choose the right coverage.
- Additional Considerations
Before making a final decision, also evaluate:
- Risk management programs
- Educational resources
- Level of personal attention
- Commitment to innovation
Considering these factors will help you choose the best medical malpractice insurance provider for your needs.
MagMutual offers comprehensive insurance protection for healthcare providers and organizations. MagMutual’s Learning Center offers many additional resources concerning the business, practice and regulation of medicine. You can learn more about these resources and services here.
Disclaimer: The information provided in this article does not constitute legal, medical or any other professional advice. No attorney-client relationship is created and you should not act or refrain from acting on the basis of any content included in this article without seeking legal or other professional advice.
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