Haris Ashley
Medical malpractice insurance is a type of liability insurance that protects medical professionals from lawsuits in the event that they make mistakes that harm patients. While insurance coverage is essential in such cases, policies often include limits on the maximum amount payable per claim and in total over the policy period. If a claim exceeds the policy limit, the insured individual may be held responsible for paying the difference. This article will explore the complexities of medical malpractice insurance, the various types of policies available, and the potential consequences of claims exceeding policy limits.
| Characteristics | Values |
|---|---|
| Medical malpractice insurance coverage types | Claims-made coverage, "tail"/"nose coverage", occurrence-made policies |
| Claims-made policy coverage conditions | The alleged malpractice and the claim are filed while the policy is still active |
| Occurrence-made policy coverage | Covers events that happened when the policy was in effect, regardless of when malpractice is first claimed |
| Per-occurrence coverage limit | The total amount an insurance company will pay for a single medical malpractice claim |
| Aggregate limit | The total amount the insurance company will pay for medical malpractice claims over a period of time |
| Personal coverage | A health care professional may carry personal coverage even if they are covered by a group or hospital's policy |
| Policy limits | Most policies offer between $100,000 and $300,000 per claim per period |
| Maximum coverage per policy period | $2.5 million |
| Policy exclusions | Criminal acts, inappropriate alterations to medical records, illegal acts, sexual misconduct, misrepresentation on the policy application |
| Policy considerations | Specialty, geographic location, and personal claims history |
| "Consent-to-settle" clause | Allows the insurer to settle a case against the wishes of the insured |
| Bad faith claim | If the insurance company refuses to pay the policy limits and the verdict exceeds those limits, the insured may have a claim against the insurance company for the excess amount |
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What You'll Learn
Claims-made policies
It is important to note that medical malpractice policies, including claims-made policies, have limits on the maximum amount they will pay out per claim and overall during the policy period. For example, a policy may offer a maximum settlement of $250,000 per claim, and if the same physician files another claim during the active policy period, the coverage for that claim will also be limited to $250,000. However, the policy may have a higher maximum coverage limit for the entire policy period, such as $2.5 million.
When choosing a claims-made policy, it is crucial to work with an insurance agent to determine the appropriate coverage limits and ensure that the policy adequately addresses the specific needs of the medical facility or practitioner. This includes considering factors such as specialty, geographic location, and claims history, which can impact the premium rates.
While claims-made policies provide coverage for alleged malpractice during the active policy period, it is important to be mindful of exclusions and limitations. Certain acts, such as illegal behaviour, criminal acts, or sexual misconduct, are typically not covered by medical malpractice insurance policies. Additionally, claims arising from inappropriate alterations to medical records or claims made several years after the policy period may also be excluded from coverage.
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Occurrence policies
Medical malpractice insurance is a type of liability insurance that helps medical professionals protect themselves financially in case their actions result in harm to patients. The two basic types of malpractice insurance are "claims-made" and "occurrence-made".
It is important to note that occurrence policies have coverage limits, and if a claim exceeds these limits, the insured individual will be responsible for paying the difference. The coverage limits typically include a per-occurrence limit, which is the maximum amount the insurance company will pay for a single claim, and an aggregate limit, which is the total amount the company will pay for all claims during the policy period. For example, a policy might have a per-occurrence limit of $250,000 and an aggregate limit of $2.5 million per policy period.
When choosing an occurrence policy, it is crucial to work with an insurance agent to determine the appropriate coverage limits and ensure that the policy adequately addresses the insured's needs. The specific limits and coverage options should be selected based on the business's or individual's unique circumstances, including their financial risks and the nature of their medical practice.
In summary, occurrence policies offer stable rates throughout the policy period and provide coverage for events that occurred during the policy period, regardless of when the claim is filed. However, it is important to carefully select the coverage limits to ensure adequate protection while avoiding excessive coverage that may result in higher premiums.
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Personal coverage
Medical malpractice insurance is a type of liability insurance that helps healthcare professionals protect themselves in case they make mistakes that harm patients. This includes doctors, nurses, medical students, hospital boards, and other care providers. A malpractice insurance policy will include limits on the maximum amount of money paid for losses claimed by a client. This is typically structured as a maximum settlement per claim and an overall maximum settlement within a single policy period, usually one year.
There are several types of medical malpractice insurance coverage. Claims-made coverage will only cover a claim if the policy is active when the alleged malpractice occurs and when the claim is filed. An occurrence-made policy will cover the doctor for events that happened when the policy was in effect, regardless of when malpractice is first claimed. Tail or nose coverage can be purchased when switching insurance carriers to ensure retroactive coverage.
It is important for healthcare professionals to be aware of the protection their policy provides and to work with their insurance agent to determine the appropriate policy limits. If a claim exceeds the policy limits, the insured individual will be responsible for paying any damages above the limit. Settlements made on behalf of the insured must often be reported and can adversely affect their insurance status and reputation.
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Exclusions
- Act of the Insured: Not all acts by healthcare professionals are covered by their malpractice insurance. Illegal acts, criminal behaviour, and sexual misconduct are typically excluded from coverage. Any misrepresentation or false statement made by the insured on their policy application may also void the policy.
- Timing of Claims: The timing of a claim is essential. Claims-made policies only provide coverage if the alleged malpractice and the claim are filed while the policy is active. Once the policy expires, additional tail insurance may be needed to cover older claims. In contrast, occurrence-made policies cover incidents that occurred during the policy period, regardless of when the claim is made.
- Consent to Settle: Some policies include "consent-to-settle" clauses, which require the insured's consent before settling a claim. Without such a clause, an insurer may settle a case against the wishes of the insured. However, even with this clause, refusing to consent to a recommended settlement may result in the insured being responsible for additional costs beyond the settlement amount.
- Policy Limits: While not exactly an exclusion, it is important to understand that medical malpractice policies have maximum payout limits per claim and overall during the policy period. If a claim exceeds these limits, the insured may be personally liable for the excess amount.
- Other Exclusions: Medical malpractice policies may also exclude coverage for inappropriate alterations to medical records and claims arising several years after the active policy period.
When dealing with medical malpractice claims, it is crucial to carefully review the specific exclusions and limitations of the insurance policy in question. Seeking legal advice from an experienced attorney can help navigate the complex landscape of exclusions and ensure the protection of one's rights.
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Consent-to-settle clauses
Medical malpractice insurance is a type of liability insurance that helps medical professionals protect themselves in case they make mistakes that harm patients. These policies, however, have limits and will only pay a maximum amount of money for the losses claimed by a client.
In response to physicians who refuse to settle even in clear cases of malpractice, some insurance companies have introduced a "Hammer Clause". This clause allows the insurance company to override the physician's refusal to settle in certain circumstances. If the physician, bound by the Hammer clause, decides to fight the lawsuit and loses, they will be responsible for paying any amounts above what the case could have been settled for. This additional cost is incurred on top of the legal fees spent fighting the suit.
It is important to note that certain states prohibit consent-to-settle clauses in medical malpractice insurance policies. This is done to encourage settlements and reduce rising medical malpractice insurance premiums. When choosing an insurer, it is advisable to consult with an insurance broker who is knowledgeable about medical professional liability.
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Frequently asked questions
If a claim exceeds your insurance limits, you will be responsible for paying the difference. You may also be responsible for ongoing defense costs and the amount of any verdict that exceeds the recommended settlement.
In this case, you may have a bad faith claim against the insurance company, requiring them to indemnify you for all amounts awarded in excess of the policy limits.
A claims-made policy is a type of medical malpractice insurance coverage that will only apply if the alleged malpractice and the claim are filed while the policy is still active. Once the policy expires, you may need to purchase additional coverage, known as "tail" insurance, to file a claim against an older policy.
