Understanding the Cost of Malpractice Insurance
In this article, healthcare providers can get answers to frequently asked questions about the cost of medical malpractice insurance, including how it is priced and the factors that go into the cost. By understanding what impacts the price of a malpractice insurance policy, healthcare professionals can ensure they secure the best coverage for the best price.
Key Concepts
- How malpractice insurance is priced
- Factors considered in the cost of malpractice insurance
- Selecting and purchasing malpractice insurance
Background facts
The healthcare industry provides essential services to millions of Americans each day. It is the largest employment sector in the United States, employing over 17 million people. In 2023, the National Health Expenditure grew to $4.9 trillion, which translated to about 17.6% of Gross Domestic Product (GDP) – and over the years, it will continue to grow.
As the healthcare field expands, so does the need for reliable and fairly priced medical malpractice insurance. This important coverage differs from general professional liability insurance, which doesn’t always fit the unique risks and needs of healthcare professionals.
If you’re a new or soon-to-be graduating healthcare practitioner, obtaining comprehensive malpractice coverage is a crucial step for your career. Even for established practitioners who already have a policy in place, it’s wise to periodically review your current coverage to ensure your needs are being met.
The cost of malpractice insurance coverage is an important expense to consider throughout your career. This guide aims to provide insights into how medical malpractice insurance pricing works and how certain factors—like the choice of carrier, where you practice, and the nature of your practice—can affect your cost. By understanding your factors, you can make a more informed decision when purchasing or renewing your malpractice insurance.
Who needs medical malpractice insurance?
In many states, the law mandates that healthcare professionals carry malpractice insurance. During your professional training, you were likely insured through your institution. Upon graduation and entering practice, securing your own malpractice insurance will be necessary.
As a new practitioner, the cost of acquiring and maintaining malpractice coverage might seem considerable, especially if you have student loans. Recognizing this, some insurance companies, including MedPro Group, may offer discounts or credits on premiums for new practitioners to make purchasing a policy more manageable.
Given that many medical professionals face a malpractice claim at some point in their career, protecting yourself with the right malpractice insurance is important. It provides protection for your practice, assets, and reputation, as well as your investment in specialized education.
How is the price of malpractice insurance determined?
Understanding the factors that influence the cost of malpractice insurance is key to grasping what you might pay. In addition to industry claims trends, the cost of malpractice coverage is typically driven by two sets of factors, which we’ll dive into below.
While we can’t speak for other carriers, these are the elements MedPro Group considers when structuring pricing:
Your details
Profession
For example, certain specialties carry different risks and therefore may have different premiums.
+ Location
Malpractice claims trends can vary between states and counties, impacting coverage costs.
+ Coverage
Occurrence and Claims-made policies have different pricing structures.
Others
Other factors, like how many hours you practice or your claims history, can also affect your cost.
Our considerations
Market Trends
Based on claim and lawsuit trends across the industry, prices can change.
+ Claims
The majority of our expenses goes toward protecting you through claims management and defense.
+ Operating Cost
We try to keep our operating expenses low, while ensuring we can pay our bills and employee salaries.
+ Stability
As a Berkshire Hathaway company committed to being around for the long haul, our rates are built to be stable and sustainable.
How is malpractice insurance selected and purchased?
An insurance carrier issues your policy and is responsible for providing your coverage. You can purchase your policy through an agent or broker, or directly from a carrier. While agents can facilitate the purchase process, carriers are the entities that provide the actual coverage.
The way you buy malpractice insurance can vary based on your professional circumstances. For example, a practitioner with their own independent practice will purchase insurance differently than one employed by a large healthcare system.
Why don’t all malpractice insurance carriers charge the same price?
Numerous factors contribute to a personalized quote for malpractice insurance. While similar data may be used to determine pricing, each insurance carrier has their own method for evaluating these factors. In addition to reviewing your personal information, local regulations, and claims trends, the company also considers its own unique risks and business philosophy.
Though it may feel like comparing apples to oranges when you try to review your options, keeping these questions and answers in mind could be helpful:
Q: Don’t all insurance carriers essentially offer the same malpractice product?
A: The short answer is no. From claims defense strategies to the types of coverage offered, malpractice insurance companies each have their own method of reviewing applications (underwriting) and determining pricing. This can account for some of the price differences between two carriers that seem to be offering the “same” product.
Pro Tip: Carefully review the fine print on any policy you are considering. Also ask about additional coverages to understand the full scope of your policy and the factors that contribute to the final cost. Prioritize comprehensive coverage and consider if any “extras” align with your specific needs.
Q: How can I get the lowest price possible on my malpractice insurance?
A: When considering the cost of your malpractice insurance, you might be tempted to choose the seemingly lowest cost option – especially if you are new to the field.
Be careful not to compromise the strength of your coverage for a lower price. The right policy will provide all the necessary coverage and protection at a fair cost. While price is an important consideration, selecting a reliable carrier with the resources to offer strong coverage and defend you against claims comes first.
Pro Tip: Invest in solid coverage from the beginning. You’ve worked hard to get where you are – don’t base your decision solely on the price tag of a policy. It may cost you thousands of dollars down the road if a claim is ever filed against you.
Now that you’re informed, get protected.
Obtaining malpractice insurance can help safeguard you in the event of a claim or lawsuit, protecting your career, reputation, and practice. It’s important to find a balance between getting the best coverage and securing it at a fair price.
The team at MedPro Group can assist you in navigating this important decision. Start a quote or reach out to our team today.