How Does Malpractice Insurance Work?

How Does Malpractice Insurance Work – Overview

Medical malpractice insurance is a form of professional liability insurance designed for health care providers, such as doctors, physicians, clinicians, registered nurses, medical specialists, etc.

This insurance coverage protects healthcare providers against claims made by patients who allege they were harmed as a result of negligence or improper care during treatment.

Medical malpractice insurance also covers liability in case of the death of a patient.

Medical errors are a significant concern in the healthcare system but are not officially classified as the 3rd leading cause of death in the US. The statement is based on specific studies’ interpretations and should not be presented as a factual ranking by official health statistics agencies. So, it is extremely likely that a healthcare services provider will need medical malpractice insurance.

This insurance policy covers punitive damages, legal costs and medical damages caused to a patient.

What is Medical Malpractice Insurance?

Most doctors and medical practitioners obtain medical malpractice insurance as a standard part of their practice to protect against potential claims throughout their careers, not just once or twice.

The Johns Hopkins study suggests that if medical errors were systematically tracked, they could potentially rank as a leading cause of death; however, this ranking is not officially recognized by health statistics agencies such as the CDC.

Medical negligence can happen anytime, such as during diagnosis, treatment or when advising patients regarding the treatment of an illness. The estimate that medical errors cause around 250,000 deaths annually in the US is based on certain studies and extrapolations; this figure is not an official statistic and varies significantly among different reports.

Studies also show that over 17,000 medical malpractice lawsuits are filed against healthcare service providers every year in the country. The frequency with which a healthcare professional may face a medical malpractice lawsuit varies widely depending on their specialty, location, and practice, and there is no fixed average period for facing lawsuits.

These studies highlight the crucial aspect of medical malpractice insurance for doctors in the United States.

While many states require medical practitioners to carry malpractice insurance, the requirements vary by state, and not all states mandate it. Some practitioners, especially those employed by large organizations, may be covered under their employer’s policy.

The cost of medical malpractice insurance premiums usually depends on the geographical location and the physician’s specialty.

The premiums of medical malpractice insurance tend to be significantly high as several factors affect the cost, including claims frequently, claims severity, location of practice and the local laws.

Are there Different Types of Medical Malpractice Insurance?

Yes, there are several types of different medical malpractice insurance programs available for medical practitioners in the United States. The most basic form of medical malpractice insurance can be purchased to cover an individual (or a group) from a private insurance carrier.

There are basically two types of medical malpractice insurance policies – claims-made and occurrence policy.

Claims-made medical malpractice insurance policies are designed to cover only those claims that were filed when the insurance policy was active.

On the other hand, an occurrence medical malpractice insurance policy offers coverage for any claims made on a treatment that happened while the policy was active, even with an expired insurance policy.

The types of coverage offered by medical malpractice insurance policies can vary significantly. These may include legal fees, lawyers’ fees, settlement and arbitration costs along with medical and punitive damages.

Medical practitioners can buy group and individual medical malpractice insurance from the medical risk retention group (RRG).

This is a group of medical professionals who provide medical malpractice insurance. Besides this, you can also choose to buy malpractice insurance policies under the coverage of your employers, such as a clinic or hospital.

If necessary, medical malpractice insurance can also be bought through state and local agencies.

Government-employed healthcare providers are often covered by the government for malpractice claims, but specific coverage details can vary based on employment terms and the level of government (federal, state, local).

How is a Medical Malpractice Lawsuit Proven?

In a medical malpractice lawsuit, the plaintiff (patient/attorney) must prove a medical professional violated the standard of healthcare offered to a patient, as defined by the medical community.

For a medical malpractice claim to be valid, the following three things need to happen:

1. The plaintiff’s attorney needs to prove that there was a breach of medical protocol, which caused the practitioners to choose a different course of action than another medical practitioner may have taken.

2. The medical practitioner caused emotional or physical injury.

3. There is sufficient evidence to prove that the medical practitioner caused the damage to the patient.


Medical malpractice insurance is extremely essential, not just because state and federal laws mandate it. A medical malpractice insurance policy is an excellent safeguard for medical practitioners to avoid liability in case of a mishap and against frivolous malpractice lawsuits.

nursing malpractice insurance

See Also

Medical Malpractice Law

Best Medical Malpractice Law Firms

Malpractice Insurance for Nurses

Cost of Malpractice Insurance for Physicians

HIPAA Medical Record Release Laws

Self-Prescribing Laws by State

Current Version
September 7, 2022
Written By
Shubham Grover
March 19, 2024
Updated By
Andrea Morales G.

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