Professional Protection Insurance: A Comprehensive Look at Medical Malpractice

Working in the healthcare sector presents unique insurance needs, with medical malpractice insurance being a critical part of professional protection. This article, the second in our three-part series on insurance planning for healthcare providers, delves deeper into understanding medical malpractice insurance, its importance, and the often-overlooked need for supplemental coverage.

The Importance of Medical Malpractice Insurance

In the healthcare profession, the risk of being named in a lawsuit is a constant reality. Medical malpractice insurance shields healthcare professionals, from doctors to nurses, against claims alleging negligence or mistakes that result in patient harm. To demonstrate the gravity of this risk, consider this: the National Practitioner Data Bank reported over 12,000 medical malpractice payment reports filed in 2019 alone.

Understanding Medical Malpractice Insurance

Employer-Provided Coverage

Many healthcare providers receive malpractice insurance as a part of their employment package. This insurance generally covers claims resulting from incidents that occur within the scope of your employment duties. However, it's crucial to fully understand the specifics of this coverage.

What it covers: Employer-provided malpractice insurance generally covers claims resulting from incidents that occur within the scope of your employment duties. However, policies can vary widely in the types of incidents they cover.
Policy limits: Check the limits of your employer's policy. These limits could be per incident and/or total per policy term. You'll need to consider whether these limits would be enough to cover all the legal fees and potential settlements or judgments if you were sued.
Shared limits: Sometimes, a policy's limits may be shared across a group of providers or the entire institution. If multiple claims deplete the policy's limit, you might be left without coverage.
Tail coverage: If you leave your job, your employer-provided malpractice insurance may not cover you for claims filed after your departure, even if the incident occurred while you were employed. You might need to buy "tail coverage" to extend the protection.

Supplemental Medical Malpractice Insurance:

There can be several reasons why the coverage offered by your employer may not be sufficient:

Gap coverage: Your employer's policy might not cover all situations. If you do any work outside of your primary employment, such as volunteering, consulting, or telemedicine, supplemental coverage can fill in the gaps.
Higher limits: If your employer's coverage doesn't adequately account for your risk exposure, supplemental insurance can help increase your policy limits.
Independent legal representation: Some employer-provided policies may not provide for independent legal representation, meaning you and your employer could end up sharing a lawyer. Supplemental coverage can ensure you have your own legal counsel in the event of a claim.

Planning Tips and Things to Watch Out For

Understand Your Policy: Knowledge is power. Take the time to fully understand your malpractice insurance policy - the limits, the scope of coverage, and any potential gaps.
Assess Your Risk: Not all specialties carry the same level of risk. If you work in a higher-risk specialty, you may require higher coverage limits.
Consider Tail Coverage: This type of coverage protects you from claims made after you've left an employer, providing the incident occurred while you were there. If you're contemplating a job change, ensure you're covered for any potential claims that might be lodged after your departure.
Evaluate the Need for Supplemental Insurance: Based on your work and personal circumstances, determine whether supplemental insurance is a prudent choice for you.

Conclusion

In the challenging world of healthcare, having the right malpractice insurance coverage can provide peace of mind and vital financial protection. As you consider your professional protection insurance needs, it's essential to understand your coverage and assess your personal risk level to ensure adequate protection.

Remember that these issues can be complex and it's critical to seek advice from insurance professionals and financial advisors who can guide you based on your unique needs and situation.

To continue reading our series on insurance planning for medical professionals, click here for our other pieces that delve into Personal Protection Insurance and Property and Asset Protection Insurance.

_{Storybook Financial is a financial planning firm determined to help those that believe in the betterment of the world around them. As a fiduciary, our service promotes unbiased financial planning with an emphasis on young medical professionals and their families. We are constantly pushing for new ways to give back to the Cystic Fibrosis community. We are based out of Iowa City | Coralville Iowa, but we serve clients nationwide with our robust virtual presence. This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.}

Sources:

National Practitioner Data Bank: https://www.npdb.hrsa.gov/
Medical Malpractice Insurance: https://www.insurance.com/health/medical-malpractice