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Do Medical Professionals Really Need Malpractice Insurance?

Maria Palma

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Medical malpractice is considered a negligence which leads to injury or death to a patient. A lawsuit involving medical malpractice is very expensive and time consuming, thus inviting the need for medical professionals to reduce their liability by purchasing medical malpractice insurance.

Medical malpractice insurance protects a professional working in the medical industry from loss due to a lawsuit. Contrary to popular belief, medical malpractice liability insurance does not work the same as auto insurance. When you purchase auto insurance, the provider usually looks at your driving experience before extending a policy to you. If you have a claim, usually your insurance premiums increase. Experiments with an individual physician's experience rating have not worked because physicians’ claims experience fluctuates over short time periods, which makes it difficult to produce a stable estimate of their risk.

Before purchasing insurance, medical professionals should take into account the laws and regulations for the state they work in. Currently, there are many states that do require anyone working in the medical field to carry a minimum amount of coverage. Furthermore, most hospitals do require malpractice insurance, plus health plans typically call for it when they contract with a doctor or physician. However, regardless of whether or not a state requires insurance, it should still be an important consideration for any medical professional.

What about medical malpractice insurance rates?

Medical malpractice insurance rates are set and approved by the state insurance commissioner in each state. From there, other factors come into play such as geographic location and specialization.

Insurance rates have increased which has caused concern among the medical community. Some analysts have speculated that there are a number of reasons why rates have risen including: The repeating cycle that the insurance industry experiences.

  • There are fewer insurers on the market and less competition on premiums.
  • Lack of income from the investment of insurance providers’ reserves.
  • Growth in the size of payouts to patients.

Anyone working in a medical profession can purchase medical malpractice insurance from an independent provider, a physician-owned mutual company, or through an insurance broker. If you do not carry insurance, they open themselves up to a potential lawsuit in case something unexpected happens. Financial ruin can ensue if a patient decides to file a claim. And it only takes one lawsuit make or break the career you worked so hard for!


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