Best Medical Malpractice Insurance 2024

What is malpractice insurance?

Medical malpractice insurance is a specialized type of professional liability insurance for licensed healthcare providers that can cover claims related to personal injury or physical injury as a result of negligence or malpractice.

The main purpose of medical malpractice coverage is to protect you and your practice from patient lawsuits.

Although this type of insurance is usually associated with doctors and physicians, it’s often available to other types of licensed medical professionals, including:

• Dentists
• Nurse practitioners
• Physician assistants
• Paramedics, and more

Malpractice insurance vs professional liability insurance

People often wonder, “Is medical malpractice insurance the same as professional liability insurance?” The short answer is no, it covers more scenarios.

Standard liability coverage protects business owners against lawsuits relating to personal injury resulting from errors in their work, bad advice, or omissions of important information. The term “personal injury” typically refers to non-physical injuries, such as emotional or a psychological injury. Standard errors and omissions insurance protects a business from claims of negligence or failure to perform professional services as contracted

Medical malpractice insurance is different from standard liability insurance as it goes a step further and can also protect against physical or bodily injury to clients.

For example, if a surgeon accidentally cuts into the bladder while making an incision in the pelvis, medical malpractice insurance could cover the surgeon against resulting lawsuits.

What does malpractice insurance cover?

Typical medical malpractice insurance policies will cover claims relating to the following scenarios:

• Medical damage
• Compensatory damages
• Punitive damages
• Arbitration costs
• Attorneys’ fees
• Court costs

What does malpractice insurance not cover?

Like other types of business insurance, medical malpractice insurance doesn’t cover any claims arising out of criminal acts. Insurers also deny claims related to:

• Sexual misconduct toward patients or clients
• Making inappropriate changes to a patient’s medical records
• For an added extra cover, you can consider a BOP or commercial umbrella insurance.
• Damage to commercial property due to malpractice.

Types of malpractice insurance policies

There are two different types of medical malpractice policies available:

1. Occurrence policy:
   An occurrence policy covers claims for events that occurred when the policy was active, even if it has since been canceled. For example, if you have an active policy from 2020 to 2026, your malpractice insurance company would cover a claim filed in 2030 for an event that occurred in 2024 when the policy was active.
2. Claims-made policy:
   A claims-made policy covers you based on when the claim is filed, not when the event occurred. For example, if a patient has hernia surgery in 2023 and displays signs of complications in 2025, a claims-made policy would cover it only if the policy is still active when the patient files the claim.

If you are wondering which type of policy is better:

An occurrence policy gives you more protection than a claims-made policy, as it continues to protect you long after some claim events occur. The downside is that occurrence policies cost more.

If the cost of occurrence coverage is a concern, consider purchasing claims-made insurance and buying tail coverage if you have to cancel the policy. Tail coverage allows you to extend the reporting period of your policy, giving you additional protection after it is canceled.

Here are the pros and cons of each policy type:

Who needs malpractice insurance?

Usually, only physicians need malpractice insurance. In some states, physicians are legally required to have malpractice insurance to be able to operate in the state.

In many cases, most other medical professionals may only need a professional liability insurance plan. While worker’s compensation insurance will cover the medical costs of employees, medical malpractice will go further and avoid any legal tangles should a patient incur an illness or injury.

That said, medical professionals that could benefit from having medical malpractice insurance include:

• Physicians
• Nurse practitioners
• Physician assistants
• Nurses
• Dentists
• Psychologists
• Optometrists
• Physical therapists
• Paramedics

Legal requirements by state

1. Certain states have specific requirements for physicians, for example:
   California only requires coverage for physicians involved in performing outpatient surgery.
2. All physicians are required to have malpractice insurance in the following states:
   Wisconsin, Rhode Island, Massachusetts, Connecticut, Kansas, Colorado, and New Jersey.
3. Physicians are required to have a minimum level of coverage to participate in certain state-funded programs in the following states:
   Pennsylvania, New Mexico, Louisiana, New York, Nebraska, and Indiana.

That said, physicians employed by federal medical facilities are typically exempt from needing malpractice insurance thanks to The Federal Tort Claims Act which allows patients to file claims against the federal government instead of directly against the physician.

If you aren’t sure if you need malpractice insurance, a licensed insurance agent can help point you in the right direction and tell you what coverage is right for you.

How much does medical malpractice insurance cost?

Medical malpractice insurance is extremely expensive and can cost between tens of thousands to a few hundred thousand dollars. This number can depend on several factors such as increases in the average settlement amount and the average number of claims filed per year.

On another note, medical professionals with higher levels of risk typically pay more for their malpractice insurance. For example, a neurosurgeon who operates on the brain and spinal cord requires much more coverage than a healthcare professional working in a telemetry unit.

Here are several factors that determine the cost of malpractice insurance:

• Profession:
  Some professions have higher levels of risk than others. For example, obstetricians manage high-risk pregnancies and difficult deliveries, resulting in an increased risk of complications.
• Years of experience:
  Inexperienced medical professionals typically pay more than professionals with decades of experience.
• Work frequency: 
  The more often you work, the more opportunities there are for something to go wrong. Therefore, full-time healthcare professionals typically pay more than providers who do some occasional moonlighting.
• Previous claims (if any):
  If you file a claim, you can expect your premiums to increase accordingly.
• Location:
  Healthcare professionals who practice in cities with high costs of living typically pay more for their insurance.
• Policy limits:
  The higher the limit on your policy, the more you have to pay for continued protection.

To see how much malpractice insurance could cost you, use our online tool to view pricing and find a great policy for your business.

Over the past several years malpractice insurance costs have increased dramatically.

The table below shows how the average premium for three selected specialties has increased from 2017 to 2022:

• All data comes from the Annual Rate Survey issue of the Medical Liability Monitor. Averages are based on the rates for physicians in seven states.*

According to Medical Economics, the insurance industry often bases prices on the general state of the economy, meaning some insurance providers have been forced to increase their rates to keep up with rising operating costs in recent years.

For example, between 2021 and 2022, the average malpractice premium increased by 2.5%. Some areas saw significant increases, while others stayed the same or had slight decreases.

What is required to prove a medical malpractice lawsuit?

As a medical practitioner, it’s important to know what types of claims can be made against you.

To prove a medical malpractice lawsuit, a claim must have the following elements: