Understanding Key Variable Provisions In Medical Malpractice Policies In Maryland

Medical providers in Maryland obtain professional liability insurance in case they are found to have demonstrated negligence in providing care for patients. There are many insurance providers offering policies and they are likely to contain various differing types of provisions. For this reason, it is critical that those obtaining such coverage review the details, gain a solid understanding of it, and make necessary decisions regarding their coverage.

In today's volatile medical environment, providers may be changing employers, entering or leaving private practice, or seeking more affordable coverage. These types of transitions all require providers and/or administrators to closely review policy details.

Direct vs Vicarious Liability

Professional medical liability coverage is required for direct liability, which is for claims associated with medical services a professional personally provides. Vicarious liability is also a key concern. This is a liability that is imputed for negligent actions of employees or others that the provider is responsible for, such as those they supervise.

Changing Providers or Retiring

Often claims of medical malpractice will not surface until months or years after the alleged failure in medical care occurred. By this time, the defendant may have already switched malpractice insurance policies, switched to another insurance company, or have retired. Some insurance policies called claims-made policies only provide coverage for claims that arise while a given policy is in effect. In these cases, it is necessary that “tail coverage” either be included in the new policy or purchased separately.

Some policies, such as those from NORCAL mutual, include this coverage for any medical provider that has been insured with them for a one-year period in case they became disabled, retired, or were otherwise no longer covered by a policy.

Consent to Settle

Malpractice insurance policies contain varying terms that relate to who has rights in deciding whether or not to negotiate a settlement agreement to resolve a claim. Often a medical professional will not want to settle with a plaintiff because they feel it will harm their reputation and signify an admittance of fault. Whether or not such terms or “consent to settle” clauses are included in a policy may have an impact on the annual insurance premium.

Deductibles & Coverage Amounts

The annual cost of medical malpractice insurance (premium) varies according to medical specialty and several other factors. The minimum limitations of liability coverage are $1 million per incident and $3 million aggregate. The deductible amount is the amount that the insured must pay before insurer coverage begins. Many policies have no such threshold; however, in order to lower premium costs, they are offered commonly at levels of $25,000, $50,000 and $100,000. Some insurers have begun to offer benefits that exceed the policy limits to cover losses of earnings and costs related to defending claims.

Coverage for Data Breaches & Cybercrime

In modern medical practices, the majority of critical and sensitive data and information is maintained electronically. If these systems are illegally accessed, a medical provider or organization may face tremendous liability for this breach. Coverage is necessary for liability from failing to maintain the privacy of key data, a great concern among regulators who quickly impose fines.

Many of these security breaches (cyberattacks) lead to identity theft, cyber extortion and other types of fraud. According to a report from the Brookings Institution's Center for Technology Innovation, cyber insurance is quickly becoming equally as important as traditional professional medical liability coverage for medical errors.