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Medical Malpractice 101
Medical Malpractice Insurance (also called Medical Professional Liability Insurance) is a type of errors and omissions (E&O) coverage that us usually purchased as a standalone policy. It protects healthcare professionals against claims alleging their negligent acts caused injury to patients. Medical malpractice insurance is essential for anyone else who provides healthcare services.
Medical Malpractice Is Usually Claims-Made
Most medical malpractice coverages are written on claims-made forms. A claims-made policy covers claims brought against the insured healthcare professional during the policy period. Claims brought after the policy has expired aren’t covered unless tail coverage was purchased (explained below). Most policies include a retroactive date. To be covered, claims must arise from acts you committed on or after the retroactive date. Claims arising from acts you committed before that date aren’t covered.
Some medical malpractices coverages are available on occurrence policies. An occurrence policy covers claims arising from acts committed during the policy period no matter when the claim is filed. Claims made many years after the policy has expired may be covered if they result from acts committed while the policy was in effect.
What’s Covered In Most Medical Malpractice Policies
Like other insurance contracts, malpractice policies contain an Insuring Agreement that describes the coverage in broad terms. It often begins with the words “we will pay.” The coverage afforded by the insuring agreement is refined and narrowed by the policy’s exclusions, conditions, and definitions.
While the specific wording may vary, a medical malpractice policy typically covers damages the insured is legally obligated to pay because of a medical incident for which a claim is made during the policy period. The insuring agreement usually contains terms like “medical incident” or “professional incident” that are defined in the policy Definitions section. It is important to understand the meanings of these terms because they determine the scope of coverage afforded by the policy.
For instance, suppose that you are a physician. You are insured under a professional liability policy that covers damages arising from a “professional incident.” This term is defined as any act, error or omission committed by you in the providing or failure to provide nursing services. Clearly, the policy isn’t suited to your activities as a physician because it is designed for nurses.
Some medical malpractice policies cover your Vicarious Liability for acts committed by other people. This coverage is essential if you employ workers or hire medical practitioners that are independent contractors. As the employer of such individuals, you may be liable for errors they make that cause injury to patients.
What To Look For When Shopping For Medical Malpractice Policies
Exclusions: Malpractice policies contain many exclusions. Here are some you should be aware of: