Being a medical professional and healthcare provider can be a demanding job. Not only is the field fast-paced and ever-changing, it’s also full of risk, and the consequences of not being prepared for those risks can be increasingly costly.
About one-third of all U.S. physicians report being sued at least once in their careers1. And while the overall number of claims has dropped in recent years, high-cost settlements appear to be on the rise. For example, a federal jury in Minnesota awarded a $111 million settlement to a St. Cloud State University student in 2022 – a verdict that may be the state’s largest2.
As the American Medical Association notes1, a lawsuit itself does not necessarily mean a doctor or healthcare provider did anything wrong, as many claims are ultimately dismissed. But protection from these claims is critical. And that’s where healthcare insurance comes in.
Understanding coverage options
Medical malpractice insurance is likely the most well-known coverage in the medical community, with some states and employers requiring physicians to carry it. Even when not required, carrying a policy is a best practice.
In general, this coverage protects medical professionals and healthcare providers against claims made in relation to treatment. This can include care-related injuries, medication errors or unnecessary surgeries. The $111 million settlement in St. Cloud resulted from a claim that a surgical procedure left the individual with permanent leg damage. Suits will name multiple parties, including the medical professional and healthcare provider.
Medical organizations should also have additional coverage to protect against risk that falls outside the scope of malpractice insurance. This can include executive and professional liability (EPL) coverage as well as cyber-related insurance. These types of policies can cover against claims related to patient discrimination, data leaks due to cyberattacks, and more. It’s a good idea to work with an insurance advisor to better understand what coverage your organization may need.
What to look for in healthcare insurance
Medical professionals and healthcare providers should seek out insurance advisors who truly understand the healthcare industry. Because of the inherent complexities of the field and the high frequency of claims, it’s important to have partners who are experienced in managing this type of risk.
These specialized advisors can help break down the nuances of healthcare policies. For instance, malpractice insurance is typically offered on a “claims-made” or “occurrence” basis and will expire after a set amount of time, like many other policy types. With claims-made coverage, a claim must occur before that expiration date for coverage to apply. Occurrence policies only require the event, such as a surgery or other treatment, to happen before the expiration date. A claim that comes after that date would still be covered. “Tail coverage” can be added to a claims-made policy to extend the coverage window and ensure there are no gaps. Tail coverage is also useful for medical professionals who change jobs and are moving from one insurance plan to another.
Having a partner who understands these ins and outs and can navigate the complex field of healthcare insurance is critical for modern medical professionals.