What is medical malpractice liability insurance?

Since malpractice lawsuits against healthcare professionals are common, it is important for physicians to have liability insurance to protect themselves in case they are sued. Professional liability insurance for physicians can be purchased by any medical professional, using the "physicians, surgeons and dentists professional liability coverage form".

Characteristics of Medical Malpractice Liability Insurance

1. Physicians professional liability insurance has two insuring agreements:
   • Under Coverage A, the insurance company promises to cover all the obligations of the named insured, arising out of the insured's legal liability for an injury caused by a medical incident. In order for an insurer to cover the damages that the insured is obligated to pay to the harmed third party, there has to be a medical incident. Medical malpractice liability insurance does not cover any other types of liability. A physician liability policy can be extended to cover healthcare professionals working under the insured's supervision by adding a special endorsement. Otherwise, nurses usually have to buy separate professional liability policies.
   • Coverage B protects physicians against group liability. This coverage is especially important for surgeons, since they are the ones most likely to be held liable for medical malpractice while being partners in a medical group during an operation.
2. Insured medical professionals are covered even when they knowingly do something to a patient, which turns out to be a mistake, for example, when they perform the wrong operation to a patient because of a faulty diagnosis.
3. Medical malpractice liability insurance has certain liability limits per medical incident and per year.
4. A professional liability policy will not cover damages arising out of general liability or liability that does not occur in professional conditions.

Cost of Medical Malpractice Liability Insurance

Professional liability policies do offer significant protection against medical malpractice liability claims. They are, however, very expensive, sometimes reaching as much as $100,000 per year. Healthcare professionals working in the areas of ER, obstetrics and gynaecology, neurosurgery and orthopaedics, pay some of the highest liability insurance rates, since there is more risk involved in their specialities. In order to lower their premiums, a substantial part of the physicians in America work in groups.

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