Doctors, Are You Covered? Understanding Medical Malpractice Insurance
One of the most important, and also one of the most nuanced, parts of taking of job as a doctor is medical malpractice insurance. It’s a necessary part of the job to make sure you are protected from having to pay for the entirety of the legal defense in the case that a malpractice suit is filed. The average payout of a malpractice suit is $353,000 -- that’s more than the amount of debt doctors graduate with after medical school. In a 2017 Malpractice Report from Medscape of over 4000 physicians in 25+ specialties, 55% of doctors said they had been named in a malpractice lawsuit. Of those, more than half have been named in multiple suits.
But while most medical institutions will provide some basic form of malpractice to their doctor employees, are you certain that they are providing the best option for your needs? Let’s break down the different types of malpractice insurance to help you figure out what the best type for you.
Types of Medical Malpractice Insurance
Medical malpractice insurance usually falls into two categories:
- Occurrence-Based Policy
- Claims-Made Policy
An occurrence-based policy provides insurance against any incident that occurs during the term of the policy - regardless of when the claim is made. As long as the event occurs during the coverage period, you will be covered. This is usually considered the “better” option.
A claims-made policy covers for any incident that occurs during the term of the policy - if the claim was filed during the policy term. The event and the claim must both occur during the coverage period for you to be covered.
If a claims-made policy is discontinued, doctors can purchase tail insurance which allows the insured to report claims for incidents that occur during the time a claims-made policy was active even after the claims-made policy is terminated. This is particularly important for doctors who are changing practice settings and only have claims-made coverage. Many hospitals will require it for incoming doctors to cover any claims that may arise from a prior position.
It’s important to note that these policies vary greatly in cost. Though it covers a lot more situations, occurrence-based policies are priced much higher from day one than a claims-made policy.
Medical Malpractice: What You May Not Know
Knowing what kind of malpractice insurance you have and how well it covers you is the first step to making sure you are protected, but what happens when a suit is filed? Here are some interesting facts and things you should know about medical malpractice suits.
- The specialties with the most doctors that have been named in a lawsuit are: Surgery (85%), OB/GYN & Women’s health (85%), and Otolaryngology (78%)
- 58% of doctors were very surprised by the lawsuit
- Two most common reasons for a suit are: Failure to diagnose/delayed diagnosis (31%) and Complications from treatment/surgery (27%)
- 33% of doctors spent more than 40 hours on their defense
- 39% of lawsuits took 1-2 years, but 10% took more than 5 years
- 30% of cases were settled before trial
Things to Know
Tip #1: During a bench trial, a judge decides if a doctor has committed malpractice. During a jury trial that falls on a jury who decide after deliberation.
Tip #2: There is a time limit on when a patient can bring a medical malpractice claim. This limitation on the time period varies based on state. You can find that information online to keep yourself informed.
Tip #3: Every case isn’t clean cut - it’s possible or even likely that both the patient and doctor had some negligence. There are a few possible scenarios if the jury or judge finds that both the patient and doctor were negligent. The final outcome depends on the state where the lawsuit was brought.
True Contributory Fault: In a state that follows true contributory fault, if the patient is negligent at all - even if the doctor is found to be 99% at fault - the patient cannot collect any compensation from other responsible parties.
True Comparative Fault: If a state follows true comparative fault, if both the patient and doctor are found negligent, then the percentage of the patient’s negligence is subtracted from the total result. For example if the jury awards $100,000 and the patient is 80% at fault, the patient is entitled to $20,000.
Modified Comparative Fault 50%: In a state that follows modified comparative fault 50%, similar to a true comparative fault system, the patient’s degree of fault is reduced from the total. However, this amount cannot exceed 50%. If the patient is found >50% negligible, they cannot collect any compensation.
Modified Comparative Fault 51%: In a state that follows modified comparative fault 51%, the patient’s fault must be less than the defendant’s fault in order for them to collect compensation. That means the defendent must be at least 51% at fault. If the fault is determined to be 50%-50% even, the patient cannot collect anything.
Tip #4: Most importantly: remember if there is a bad outcome, that doesn’t necessarily mean there was malpractice or that it was your fault.
Make Sure You’re Covered - Inside and Outside the Hospital
Having insurance for your life outside the hospital or medical institution is just as important as the coverage you have while you’re at work.
Disability Insurance Takes Care of You
Don’t skimp on disability insurance - though it may seem like a one in a million possibility, there’s always a possibility. Particularly for doctors, things like your eyesight and your hands are your life. In the rare case that something happens and you can no longer practice, you want to make sure you’re covered.
Start with true-own occupation coverage which ensures that even if you can’t do all the duties of your medical specialty, you can still collect a benefit even if you’re working in a different role. There are also a number of disability riders to consider depending on your specialty and situation including:
- Cost of living adjustment (COLA)
- Student loan rider
- Retirement protection
- Future purchase option
Look into which type of personal disability coverage makes the most sense for you.
Umbrella Insurance Takes Care of Everything Else
Now that you’re taken care of, what about if something happens to one of your large investments - namely your house or your car. Your malpractice insurance may cover you for any work-related incidents, but there still remains the risk of non-occupation-related incidents. Having a comprehensive protection plan will make sure you’re prepared for anything.
For example, let’s look at car insurance in New York. The average car insurance rate in New York is $1759 a year. This gives you the minimum amount of coverage of $25K for bodily injury, $10K for property damage and $50K for personal injury protection (PIP). But this amount doesn’t cover you for much at all if someone actually gets injured in an accident.
On the flip side, an umbrella policy covers not just your car, but any property damage, bodily injury, legal damages and fees. On average an umbrella policy will run you around $150-$200 a year for $1M in coverage and an additional $100 for each additional million. Having a policy like this will not only save you money but also protect you from large lawsuits and ensure that your future wages are safe.
"Anything that can go wrong, will go wrong." - Murphy's Law.
With this being the case in the universe, we definitely should all be prepared for when things go wrong. Keeping yourself protected in all cases will ensure that you are prepared for any situation that may arise.
If you have questions about the type of malpractice you are being offered by a new job, or if you have questions about the type of malpractice insurance you can find on Nomad, feel free to reach out to our Nomad Navigators or search for a job here. Every locums on Nomad has the malpractice insurance listed to make sure you know what policy you will have.
The Nomad Team