Medical Malpractice Insurance
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State laws for medical malpractice insurance

Medical malpractice insurance is a form of professional liability insurance. It protects healthcare providers against financial losses due to claims of professional negligence, and may be required depending on the state you work in.

What is medical malpractice insurance?

Medical malpractice insurance policies protect healthcare professionals, therapists and counselors, and medical facilities against claims of negligence, such as:

  • Failure to provide quality care
  • Causing pain, suffering, or mental anguish to a patient
  • Economic damages from a patient’s lost wages or healthcare costs

How do I get medical malpractice insurance?

It's easy to get free quotes for medical malpractice insurance with Insureon. We'll ask you basic facts about your business to help you find coverage that matches your unique risks and meets the requirements in your state.

Contact our dedicated medical malpractice insurance specialist to get started.

Why should you have medical malpractice coverage?

A type of medical liability insurance, medical malpractice insures healthcare professionals and clinics against several types of health-related claims, as well as healthcare and therapy and counseling services provided through telemedicine. It keeps your business financially protected, helping you to avoid paying costly legal fees and related expenses out of pocket.

Malpractice insurance is sometimes referred to as professional liability insurance or errors and omissions insurance (E&O). While the terms are often used interchangeably, they’re not identical.

Professional liability coverage usually relates to a policyholder’s business activities, while malpractice covers your legal defense costs or settlement if you’re accused of causing a patient’s injury or death.

Medical malpractice coverage may be required by your state or employer in order to work with patients.

A physician reviews a health plan with their patient

Medical malpractice insurance typically covers:

  • Misdiagnosis of a patient
  • Misreading or overlooking lab results
  • Errors in treatment
  • Unnecessary surgery
  • Improper medication or dosage
  • Premature discharge from a clinic

When is medical malpractice insurance required?

Though there’s no federal requirement, many states have medical malpractice insurance requirements in place for healthcare professionals, especially doctors with admitting privileges.

Currently, seven states require physicians to maintain malpractice insurance: Colorado, Connecticut, Kansas, Massachusetts, New Jersey, Rhode Island, and Wisconsin. The amount of coverage required ranges from $100,000 to $1 million per occurrence, and $300,000 to $3 million in annual aggregate coverage.

Seven other states, Indiana, Louisiana, Nebraska, New Mexico, New York, Pennsylvania, and Wyoming, take a different approach related to state liability reform. They require a minimum level of coverage for doctors to participate in state programs that either limit the amount of damages from a malpractice claim, or provide supplemental malpractice coverage to physicians.

In California, physicians are only required to carry malpractice insurance if they perform outpatient surgery.

Florida has certain stipulations healthcare professionals must meet in order to be exempt from insurance. Doctors must post a bond, have an escrow account, or get an irrevocable line of credit letter from a bank or other lending agency, which cannot be used for legal fees. They must also post a sign in their offices to inform patients they don’t carry malpractice insurance.

Who should carry medical malpractice insurance?

Even the most experienced and attentive professionals can make a mistake or face an expensive lawsuit. Medical malpractice insurance covers not only your cost of litigation, such as attorney's fees, but also punitive and compensatory claims for medical damages.

Even if your employer or the facility where you work has its own liability protection, it can be worth pursuing your own malpractice insurance to make sure you’re fully covered.

Medical liability insurance is especially beneficial for anyone working in a health-related field, including:

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Doctors

Doctors may need medical malpractice insurance to comply with the laws in their state. As an example, Colorado physicians must carry malpractice insurance with at least a $1 million per-occurrence limit and $3 million aggregate limit.

From medical errors to misdiagnoses and missed appointments, there are several reasons why a patient might sue a doctor. Medical malpractice insurance not only protects you and your practice, it's often required by hospitals and healthcare facilities as part of their own risk management plan.

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Nurses

Nurses regularly interact with patients, which leaves them vulnerable to multiple risks. The hospital, clinic, or temporary agency that employs you might have its own liability coverage but might not give you sufficient financial protection in the event of a claim.

Some states require this coverage for nurses. For example, Florida nurses are required to be covered by malpractice insurance unless they qualify for a financial exemption.

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Dentists

As a dentist, you’re expected to recognize dental ailments, such as a cracked tooth, and then recommend treatment. However, a patient might not understand the risks involved with a treatment or they might not be satisfied with the results, which could lead to a costly lawsuit.

Dental malpractice is required to practice dentistry in some states and counties, such as Connecticut. However, it is up to the discretion of each individual area.

Protect your business with medical malpractice insurance
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Acupuncturists

A patient could accuse an acupuncturist of causing nerve damage or an infection during treatment. Malpractice insurance for acupuncturists would provide you with financial protection against these types of claims.

California is one example where acupuncturists must provide a certificate of professional liability insurance with a minimum of $100,000 per claim and a minimum annual aggregate of $300,000. 

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Physical therapists

Physical therapists make direct contact with patients through stretching, massage, and physical exercise. This close level of interpersonal contact means that even the most experienced physical therapist is at high risk of an injured patient accusing them of a mistake.

For licensed physical therapists in Pennsylvania, they’re required to maintain professional liability insurance in the minimum amount of $1 million per occurrence.

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Podiatrists

Podiatrists see a variety of patients for a whole host of reasons. A client could sue because of a misdiagnosis that led to unnecessary surgery. They could also sue because they're unhappy with the appearance of their feet after an ingrown toenail removal procedure.

In Wisconsin, as a podiatrist, you’re required to carry malpractice liability insurance with minimum limits of liability of $1,000,000 per occurrence and $1,000,000 aggregate.

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Counselors

When it comes to liability, therapists and counselors are in a unique position. They must look out for their patients’ well-being, as well as exercise discretion for their right to privacy and confidentiality. However, should the therapist-client relationship break down, it could result in a costly malpractice lawsuit.

How much does malpractice insurance cost?

A physician reviews a health plan with their patient

Professional liability insurance costs an average of $61 per month for Insureon's small business customers, with healthcare professionals paying about $40 per month for coverage.

The cost primarily depends on the risks of your profession. Other factors include:

  • Your location
  • Business size
  • Day-to-day operations
  • Your policy limits and deductible
  • History of medical malpractice claims

What if I cancel my medical malpractice insurance?

Most medical malpractice policies are claims-made policies, which cover incidents and claims that happen while the policy is active. If you face a lawsuit after canceling your policy, it would not be covered, even if you had coverage at the time of the incident.

Additionally, if you’re sued for an incident that happened before the effective date of your policy, you wouldn’t be covered. Fortunately, you can set a retroactive date to gain coverage for events that occurred in the past.

This is why it’s important to always maintain your medical professional liability insurance.

What other types of insurance coverage do I need?

Medical malpractice insurance won’t protect you against every business risk. Depending on the specifics of your business, you may need other policies, some which may be required by law.

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Get medical malpractice quotes from trusted insurance carriers with Insureon

Are you ready to safeguard your business with malpractice insurance? Whether you are a doctor, surgeon, or other medical professional, you can call our dedicated agent to get started today.

Updated: September 12, 2023
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