Medical malpractice insurance can help healthcare professionals cover the costs of lawsuits alleging that they did something – or didn’t do enough – and harm was caused. This means that someone claims that the healthcare provider’s action (or inaction) fell below the standard of care and caused injury, death, or mental harm, and they’ve filed a lawsuit as a result. Regardless of whether it’s a valid case or not, a lawyer’s time will likely be needed, which can often be costly. For this reason, having malpractice insurance can be a huge relief.
Costs typically covered by medical practice insurance include:
- Attorneys’ fees
- Court or arbitration costs
- Settlement payouts
- Costs to defend a board action or investigation against you
Some policies also include:
- HIPAA proceedings reimbursement
- Travel expense reimbursement
- Lost wage reimbursement
- Crisis management public relations consultant fees
- Peer Review Panel work (see below)
Many medical malpractice insurance policies also protect against liability as a result of work done on a peer review panel. This means that if you’re part of a medical panel and help a colleague make a decision, and the patient then sues the panel, your coverage would likely kick in.
What Is Not Covered by Medical Malpractice Insurance?
Policies typically have a list of types of actions or complaints that they don’t cover (called “exclusions”), so it’s important to read through these lists when comparing policies. The most common exclusions are sexual misconduct, intentional and/or criminal acts, and acts outside the scope of your license.
In the next chapter of this guide, we'll share some real-life examples of malpractice cases that involved various types of healthcare professionals.