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What Is Medical Malpractice Insurance?

Medical malpractice is professional negligence involving doctors, hospitals, and healthcare professionals. When a patient is injured by a doctor’s medical errors, the injury victim can file a medical malpractice lawsuit against the doctor involved in the medical accident. If a doctor is found liable, the doctor may have to pay for the injury victim’s losses, including medical bills, lost wages, pain and suffering, and other damages. 

Medical malpractice insurance provides liability coverage for medical professionals who are alleged to be responsible for a medical injury. Medical malpractice insurance can be very expensive, especially for some medical practice areas. In part, this is because medical malpractice cases are long, complicated, and may involve a lot of potential liability. 

For patients who are injured because of a medical error, they may have to deal with the medical malpractice insurance company for the majority of their claim. The insurance companies often take over the representation of the doctor, including medical malpractice litigation and settlement negotiation. If you have questions about how medical malpractice insurance will impact your medical malpractice case, contact an experienced medical malpractice law firm

Who Needs Medical Malpractice Insurance?

Medical malpractice insurance acts like other forms of insurance that consumers may be more familiar with. For example, if you get into a car accident with another driver, your insurance company may step in to represent you in any legal claims. The insurance company may pay out for any liability that is covered by the policy and negotiate a settlement to avoid paying out the maximum liability coverage. 

Medical malpractice insurance is similar. When a legal claim is made against a doctor for alleged negligence or malpractice, the insurance company steps in to handle any liability claims. The insurance company may act on behalf of the doctor to dispute any claims of negligence and try to avoid liability for any injuries. The insurance company may also try to settle with the injury victim to avoid the maximum liability associated with a jury award in favor of the injury victim.

Depending on the state, not all doctors are required to have medical malpractice insurance. However, many hospitals require doctors to have medical malpractice insurance if they want to treat patients within the hospital system. However, without medical malpractice insurance, a doctor may be held liable for any injuries out of their own pockets. 

What Are Medical Malpractice Insurance Premiums

The insurance premium for most doctors can be between $5,000 and $50,000 per year. Some specialties have much higher premiums, including surgeons and OB/GYNs. However, even with higher premiums, if a doctor faces a malpractice claim worth $500,000, one accident could exceed the costs of insurance for multiple years of coverage. Because of the risks associated with medical errors, most doctors carry insurance whether they are required to or not. 

Many doctors carry a standard liability coverage of $1,000,000 per claim with $3,000,000 aggregate limits. Doctors who are employees of a hospital or medical facility may have insurance under their employer. An employer’s medical malpractice insurance policy generally provides coverage for when the employee is acting within their scope of employment. This would likely not cover a doctor who was also engaged in medical care outside of their employment. 

Types of Medical Malpractice Coverage

There are different types of coverage for physicians and hospitals, depending on the needs of the doctor. The most common type of medical liability insurance is for claims-made insurance to respond to malpractice claims. Some doctors may have private practice insurance to cover their individual practice. Other doctors may use group medical malpractice policies for multiple doctors. Additional and add-on policies can include: 

Medical Malpractice Premiums by Medical Specialty 

Different medical specialties may have different risks associated with medical malpractice. As a result, different specialties may have different premiums for medical malpractice insurance. According to a survey published in the New England Journal of Medicine, the following medical specialties had the highest rates of medical malpractice claims made against doctors: 

However, those areas with the highest percentage of claims did not always have the highest payments made to injury victims. Some of the specialties with the highest payments to plaintiffs in medical malpractice cases included: 

  1. Pediatrics
  2. Pathology
  3. OB/GYN
  4. Neurosurgery
  5. Pulmonary medicine

In 2008, the mean indemnity payment for all practice areas was $274,887. However, the average for pediatricians was more than $520,000, with pathologists averaging over $383,000, and neurosurgeons more than $344,000. However, the area with the most payments exceeding $1 million was obstetrics and gynecology, followed by pathology, anesthesiology, and pediatrics.  

What Does Medical Malpractice Insurance Cover?

Medical malpractice insurance coverage varies depending on the individual policy. However, most policies cover bodily injury and medical expenses involving claims of professional negligence. Professional negligence for doctors is a breach of the medical duty of care that causes injury or harm to the patient. To show malpractice, the patient has to show the doctor deviated from the standards of care, which caused the patient’s injury. 

What the insurance pays out in a malpractice lawsuit depends on the individual situation. The damages in a serious injury accident or a permanent disability claim can be much more substantial than in a minor injury. Injury cases involving brain damage and birth injuries can be some of the most costly claims. In these types of cases, the insurance company may be responsible for covering: 

  • Medical bills
  • Future medical expenses
  • Loss of earning potential
  • Lifelong care 
  • Pain and suffering

However, malpractice insurance is not limited to paying out settlements to patients. Malpractice also covers the cost of defending the lawsuits. Medical malpractice cases can be long and involved on both sides. The injury victim’s lawyer and the insurance company lawyers spend a lot of time, effort, and money researching and investigating medical injuries. When a doctor is sued for malpractice, the malpractice insurance company steps in to defend the claim. 

How Does Medical Malpractice Insurance Work With Multiple Defendants?

Another reason that medical malpractice cases are so complicated is because there are often multiple defendants. The state laws that put a time limit on filing malpractice claims make it so that a plaintiff has to name all possible defendants in a case or they could risk losing their case if they don’t name everyone involved. At the beginning of a malpractice lawsuit, there could be 10 or more defendants, even if only one doctor was the cause of the malpractice. 

In general, each doctor or surgeon has their own legal defense in the case, although some defendants’ cases may be combined depending on their involvement in the case. With so many defendants’ lawyers, it can take forever to go through hearings, status conferences, filing motions, scheduling depositions, and getting through discovery. 

As the case moves along, more defendants may be released as the injury claim is focused on specific negligent actions by a handful of doctors, nurses, and hospital officials. However, before you settle your case, you may have to settle individually with each defendant. These negotiations with multiple defendants often come down to the end, right before the case goes to trial. It can be difficult to know what to expect when there are multiple doctors and multiple defense lawyers making different settlement offers. To understand the process better, talk to your medical malpractice attorney for more information. 

State Laws and Medical Malpractice Coverage

Different states have different laws for medical malpractice and insurance coverage. Some states require doctors to carry medical malpractice insurance while other states do not. State laws and medical requirements may also impact the malpractice insurance premiums and liability limits.    

Chicago Doctors and Medical Malpractice Insurance 

Illinois does not have a state law that requires doctors to have individual medical malpractice insurance policies. However, most hospitals will require doctors to have insurance if they want to practice in the hospital. Most doctors may have standard $1 million/$3 million liability coverage but some surgeons and OB/GYNs may require higher liability coverage. 

The largest malpractice carrier in Illinois is ISMIE with about 1/3rd of the market share for medical malpractice coverage in the state. Doctors in larger urban areas, like Chicago and Cook County, generally have higher insurance rates. According to MEDPLI, the following is the average claims made insurance rate for these specialties: 

  • OB/GYN: $110,000
  • Major Surgery: $110,000
  • Orthopedic surgery: $74,000
  • General surgery: $74,000
  • Emergency Medicine: $54,000

Medical Malpractice Insurance in Baltimore

Doctors in Maryland are not required by state law to have medical malpractice insurance. However, most hospitals will require doctors to have coverage for admitting privileges with a hospital. Doctors without insurance may also be excluded from preferred provider organizations or managed care organizations. 

Medical malpractice policy rates may be lower in Maryland than in other states because the state has a cap on non-economic damages. Non-economic damages caps can lower the costs of medical malpractice but it puts the burden on the injured patient. For example, for claims arising in 2023, the cap on noneconomic damages is $920,000. This means if a jury awards a birth injury victim $2 million in noneconomic damages, the judge will automatically reduce the amount to not more than $920,000.

Philadelphia Doctors and Medical Malpractice Insurance 

In Pennsylvania, most doctors are required to have medical malpractice insurance. Under the MCARE Act, all doctors practicing in the commonwealth have to carry professional liability insurance. MCARE requires doctors to carry a minimum of $1 million per claim/ $3 million aggregate. With the MCARE fund, contributed to by doctors in Pennsylvania, the doctor’s private insurance provider will insure the first $500,000 of a malpractice claim and MCARE will cover the rest, up to $500,000. 

What Are Medical Malpractice Liability Insurance Companies?

There are a number of professional liability insurance companies in the United States. However, some insurance companies have a greater presence in the insurance industry. According to one survey, the largest medical malpractice insurer in North America was Berkshire Hathaway Group, representing more than 17% of the industry. The top 10 medical malpractice liability insurance companies in North America by market share include: 

  • Berkshire Hathaway Group
  • Doctors Co Group
  • CNA Insurance Group
  • Coverys Group
  • ProAssurance Corp Group
  • MCIC Vermont
  • MagMutual Insurance Group
  • Norcal Group
  • Liberty Mutual Group
  • MMIC Group

Get Help Dealing With the Medical Malpractice Insurance Companies

Most people never have a good experience dealing with insurance companies. Insurance companies are happy to take your money but when it is time to pay out for an accident or property damage, they may say your damage is not covered or the deductible is too high to be worth anything. 

After an injury, dealing with the medical malpractice company can be a terrible experience. The medical malpractice insurance company wants to do what they can to reduce their costs, by trying to get your case dismissed or reduce your settlement offer by as much as possible. This is why it is important to have your medical malpractice attorney deal with the insurance representatives so you don’t have to. 

An experienced medical malpractice attorney is used to malpractice insurance company lawyers and may be familiar with the exact defense lawyers in your case. They know what kinds of things the insurance company might try to reduce your damages, question your injuries, or get your case dismissed on a technicality. Because your lawyer knows what to anticipate, they can take action before filing the lawsuit to protect your rights. 

If you were the victim of a medical injury after receiving negligent medical treatment, you may be able to recover compensation for your injuries. Call experienced medical malpractice attorneys who can look at your case, answer your questions, and help you understand your legal options to file a claim against a negligent doctor. Contact Gilman & Bedigian online or at 800-529-6162 for a free consultation.

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