Questions You Should Ask About Your Malpractice Insurance

Malpractice insurance is one of the most important things that every healthcare professional needs—whether a caregiver or a physician. But these insurance policies can be complicated to understand. If you’re a caregiver or healthcare professional, you should ask these questions about your malpractice insurance to better understand the key details of your policy.

Is It a Group or Individual Policy?

The first thing a healthcare professional should know about their malpractice policy is whether it’s an individual policy or one you share with other healthcare professionals. Most healthcare professionals working in large facilities will typically join an existing group policy paid for by the employer.

It’s a different story with caregivers, as many are self-employed and therefore need to obtain an individual policy. Caregivers that work through an agency typically have to join the agency’s group policy before they can begin work.

Is It an Occurrence-Based or Claims-Made Policy?

Next, it’s crucial to understand whether the malpractice policy is claims-made or occurrence-based. Claims-made policies apply only to claims for incidents that occurred when the policy was active.

Occurrence-based coverage is more thorough as it covers claims that occurred while the policy is active, even if it’s since expired. Claims-made policies are much less expensive and common, especially for group policies.

What Are the Policy’s Liability Limits?

You will also want to know how much coverage the policy offers should you face a lawsuit. Group policies can include shared liability limits and individual policy limits.

A shared limit means that every person covered by the policy has the same liability limit, regardless of their position, while an individual policy limit means individuals have distinct, typically higher limits. Shared policy limits are typically lower and more affordable, but individual limits are more substantial—so consider what’s most important for your career before deciding.

Pro Tip: Check if the insurance is “Indemnity-Only,” which means the coverage only activates when you reach an indemnity (settlement). These policies don’t cover the legal costs of defending against malpractice claims.

Who Decides When To Settle?

Another important question you should ask about your malpractice insurance is who has the power to settle. Some policyholders may be surprised to learn that they can lose the decision of whether to settle if they don’t have a consent-to-settle clause.

A consent-to-settle clause means that the insurance provider must have the individual’s consent to settle with a plaintiff. Without it, the provider can agree with the plaintiff, even if the defendant would rather fight the case than agree to a settlement.