Medical Malpractice Insurance
Frequently Asked Questions

Although there is no substitute for speaking with John, our experienced Senior Broker, please take a moment to familiarize yourself with the basics of medical malpractice insurance.

General Questions

1. What is medical malpractice?
2. What is medical malpractice insurance?
3. Why do I need medical malpractice insurance?
4. Does having my own professional liability insurance make me a more likely target for a lawsuit?
   
5. What should I look for?
6. Is having coverage through my hospital or facility enough?
7. I've read about medical malpractice insurance carriers going out of business. How can I be sure that my carrier will still be around when I file a claim?
8. What information does a malpractice insurance company report to the National Practitioner Data Bank?

Claims

1. How do I file a claim?
2. How are legal costs treated?
3. Will I ever be personally liable for a malpractice claim?

Policy-Related

1. How much coverage do I need?
2. What do coverage limits mean?
3. Are all medical practice policies essentially the same?
4. What is a "claims-made" insurance policy?
5. What is an "occurrence" insurance policy?
6. What is a reporting endorsement or "tail" coverage?
7. What is prior acts coverage?

Premiums

1. Does my specialty affect my premium?
2. How are premiums calculated?

General Questions

1. What is medical malpractice? Medical malpractice is defined as negligence committed by a professional health care provider resulting in harm to a patient or patients. This arises when the doctor, nurse, dentist, technician, hospital or hospital worker's performance of duties departs from what is considered standard for those with similar training and experience.
   
2. What is medical malpractice insurance? Medical malpractice insurance is insurance that covers healthcare professionals for such things as court costs, settlements and damages associated with a malpractice lawsuit.
3. Why do I need medical malpractice insurance? Generally speaking, medical malpractice insurance comes into play when you are named in a lawsuit by a patient or patients. Without it, you could be held personally liable for court costs and for settlements and damages.
4. Does having my own professional liability insurance make me a more likely target for a lawsuit? No. Having your own professional liability insurance will, however, provide you with your own attorney, can provide coverage in addition to your group policy and can provide complete coverage in instances where you are not covered by your group policy.
5. What should I look for? The insurance company you choose should be well-established and financially sound. That is why it is not always best to choose the carrier with the lowest premiums. You should also look for "occurrence" policies or "claims-made" policies with "tail coverage." The details are complicated, so please call us for suggestions and help.
6. Is having coverage through my hospital or facility enough? That depends on a number of different factors. Ask yourself the following questions, then give us a call:
   • Do you want portability in the event that you change employers or your current facility closes or consolidates?
   • Is having your own legal counsel important?
   • Does your group policy offer inadequate coverage?
   • Do you give medical advice to friends, acquaintances or even strangers outside of work?
7. I've read about medical malpractice insurance carriers going out of business. How can I be sure that my carrier will still be around when I file a claim? Although there are no guarantees, you can start by researching the financial stability of the insurance carriers that you are considering through resources like Standard and Poor's or Moody's. However, one of the biggest advantages of working with an independent brokerage such as Tegner-Miller Insurance Brokers is that we have already done the work for you. All of the carriers that we represent are financially sound "A-rated" companies.
8. What information does a malpractice insurance company report to the National Practitioner Data Bank? Any payment that is made by an insurance carrier on behalf of a health care professional in the settlement of, or in satisfaction of a claim or judgment against that practitioner, must report the payment to the Data Bank.

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Claims

1. How do I file a claim? You must contact your insurance carrier. As policies and procedures differ from carrier to carrier, only your carrier can give you the detailed instructions you need. If you can, try and make note of how, when and where the possible wrongful act took place, the names and addresses of any witnesses and injured people and the nature and location of any injury or damage. Important! Do not assume any financial obligation or pay any money. If you do, your insurance company may not cover you for those costs.
2. How are legal costs treated? Legal costs can either be included within the limits of liability or they can be covered separately, in addition to the limits of liability.
3. Will I ever be personally liable for a malpractice claim? Possibly. If you are not covered at all or are inadequately covered by a medical malpractice insurance policy, you could become personally liable in a malpractice lawsuit.

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Policy-Related

1. How much coverage do I need? The amount of coverage that you need depends on a number of factors including income, assets and affordability. Please contact us for a policy tailored to you.
2. What do the coverage limits mean? A $1,000,000/$5,000,000 limit means that the most that would be paid on any one claim is $1,000,000 and the number of $1,000,000 claims that could be paid on your behalf in a year is 5, for a total annual aggregate of $5,000,000.
3. Are all medical practice policies essentially the same? No, there can be significant differences in coverage such as the availability of coverage for ancillary personnel, sexual misconduct, etc.
4. What is a "claims-made" insurance policy? A "claims-made" policy covers claims made against you only while the policy is in effect. The advantage is that premiums are based on actual experience. The disadvantage is that the policy must be continued indefinitely to assure coverage for claims filed in the future for actions that occurred in the past. If purchasing this type of policy, you should always look into "tail" coverage, which covers you for claims made after policy expiration for incidents occurring during the policy period.
5. What is an "occurrence" insurance policy? An "occurrence" policy covers you for alleged acts of negligence that occurred while the policy was in effect. It does not matter if the coverage is in effect at the time the claim is made. The benefit of occurrence coverage is that even if you cancel your policy at a future date, you will still be covered for events that occurred while the policy was in effect. Occurrence policies tend to have higher premiums than "claims-made" policies and may be more difficult to obtain.
6. What is a reporting endorsement or "tail" coverage? Tail coverage is usually purchased when you terminate a claims-made policy for any reason and is purchased from the carrier that provided your original coverage. It allows you to continue reporting claims for the years that you were insured under your original policy.
7. What is prior acts coverage? Prior acts coverage provides coverage for claims that arose from the "prior acts" of the policyholder while insured with the previous claims-made carrier. It eliminates the need to purchase a reporting endorsement.

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Premiums

1. Does my specialty affect my premium? Yes. Premiums vary from specialty to specialty. Please call us if you have a question about your specialty.
2. How are premiums calculated? Depending on the type of policy that you have, premiums will be calculated differently. The most important factor is experience or predicted experience. "Claims-made" policy premiums are based on actual "experience," or the number and severity of claims made. "Occurrence" policy premiums, on the other hand, are based on a projection of your experience. In addition, both types of policies take into account your specialty, geographic location and a host of other factors when determining rates.

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