MedMalMonthly: Malpractice Insurance Basics


  • Policy - Insurance is purchased through this contractual agreement. 
  • Premium - Policy is purchased in exchange for this payment, a premium. 
  • Malpractice insurance provides reimbursement to the third party (injured person or family) called indemnity; most policies provide coverage to the doctor for cost incurred in defending a claim (first party coverage). 
  • Liability limit (example 1 mil/3 mil) means you are covered up to 1 million per event and up to 3 million per policy period. 

Types of Policies:

  • Occurrence Policy - The insurance company is responsible for covering a claim if that event that gave rise to that claim takes place during the term of the policy (even if you are no longer currently under that policy). 
  • Claims-Made Policy - The date on which the event took place that gave rise to the claim does not matter; only the date on which the claim is made matters.
  • Tail coverage - Converts a claims made policy to an occurrence policy. 

When Will My Insurance Carrier Not Cover Me?

  • Emergency Physician policies are site specific and patient specific - ED doctors are covered for care in the emergency room; check with your insurance company before you provide care to a non-emergency room patient like if you volunteer at an event or a camp. 
    • Good Samartian is an exception to the above! There are 3 criteria to meet this:
      • You do not bill for services. 
      • No pre-arranged doctor-patient relationship. 
      • Services provided in a situation for which you were chanced upon. 
  • No Chart = No Coverage
    • Altering a medical record negates the credibility of your chart and my void your insurance coverage (and you may find yourself in trouble with the medical board). 
    • Beware of medical care, medical advice and writing prescriptions to friends and family as you often do not have a chart if something goes wrong. 
  • Not following your state laws:
    • Know your mandatory reporting laws as you have an obligation to the known and predictable third party (child abuse, infectious disease, Tarasoff, etc.)
  • Intentional Torts/ Criminal Charges:
    • Willful or gross negligence 
    • Assault, especially sexual assault - always remember your chaperones
    • Battery - remember informed consent for procedures
    • Concealment of physician impairment
    • Insurance fraud
    • Illegal use of controlled substances

What happens if the verdict is greater than my policy limit? 

  • Common misconception that a doctor can lose house and life savings in a runaway jury verdict when in fact it is rare for a physician to pay out of pocket even when a verdict exceeds the policy limit; almost all cases settle without the doctor having to pay anything. 
  • For emergency medicine, most payments are less than $500,000.
  • It is rare for a plaintiff to pursue a physician for excess damages and the plaintiff's will typically target the limits of all defendants named in the suit and will often go for the deep pockets (hospital). 
  • Data is sparse, however, as legal system publishes information about filed cases and judgements rendered but doesn't publish data about collection of these judgements.