Month: April 2023

Risk assessment is an integral part of insurance. Insurance carriers categorize potential policies by risk, affecting premiums, coverage, and all other parts of the policy. In this guide, we’ll examine the risk classifications for malpractice insurance, explain the elements of a successful malpractice lawsuit, and more.

How Risks Are Classified in Malpractice Insurance

When attaining malpractice insurance for an individual or group, the insurance carrier will place the policy into one of their risk categories. Below, we’ll highlight the main risk classifications for malpractice insurance and what they mean, so individuals can better understand their policy.

Preferred Risk

The best risk category for a policy to be in is preferred risk. A preferred risk individual or group policy is a medical professional or practice with a lower risk than average of filing a claim.

Medical malpractice liability Insurance providers use stats to determine these classifications—certain specialties and practices are more or less likely to be sued for malpractice than others. Examples of low-risk practices and professions include pediatrics, psychiatry, and general family practice. These aren’t guaranteed risk-free, but they come with the least risk statistically.

Standard Risk

As one could guess, the standard risk classification is the average risk for most malpractice policies. These individuals and groups are not significantly risky or low-risk and constitute the majority of medical malpractice policies.

Most medical professionals would fall into this category—typically registered nurses to physicians and specialists. But while an individual may work in a standard risk job, if they have a history of malpractice or prior lawsuits, they may be bumped into the impaired risk category.

Impaired Risk

Lastly, the policies considered the riskiest are placed in the impaired category. The insurance carrier considers an impaired risk to be an individual or practice that is riskier than the average but not such a liability that they’re not worthy of a policy.

Those that fall in the impaired risk category are typically those that work in specialties with the highest rate of malpractice claims, which include:

• • Plastic surgeons
• • Cardiovascular surgeons
• • OB-GYNs
• • Urologists

Surgeons are often classified as impaired risks because they’re common targets for malpractice claims.

The Elements of a Successful Malpractice Claim

Along with understanding the risk classifications, it’s also wise to understand the basic elements of a malpractice claim. For a malpractice lawsuit to be successful, it must prove four elements—a duty owed to the patient, a breach of that duty, injury caused by the breach, and damages.

These elements are sometimes called the four Ds: Duty, Dereliction, Direct Cause, and Damages.

Duty Owed to Patient

The first element that a malpractice lawsuit must prove is that the defendant had a duty of care to the patient (plaintiff). A primary physician has a duty to provide competent and careful treatment and diagnosis to the patient, and a surgeon has a duty to perform the surgery competently to the best of their abilities.

A patient who suffers injury can’t simply sue whoever they want to and expect them to be held responsible if they did not have a duty of care. This element is typically the easiest part of the malpractice suit to prove and is generally uncontested by the defendant.

Breach of Duty

Once the defendant’s duty of care to the plaintiff is proven, the lawsuit must also establish that there was a breach (otherwise known as dereliction) of duty. This element is much harder to prove as it must show the defendant deviated from their duty and failed to fulfill their obligations.

Examples of breach of duty include misdiagnosing a patient, prescribing the wrong type of medication, or making surgical mistakes. Since understanding the core duties of medical treatment requires a lot of education and skill, expert witnesses and testimony are typically needed to establish whether the defendant breached their duty.

Injury Caused by Breach

If the breach of duty is proven, then the case can move to prove that the plaintiff suffered an injury due to the cause of the breach. In medical malpractice, it’s not enough that there was a mistake, but it must be proven that the mistake caused harm.

A plaintiff may claim that a misdiagnosis caused injury, but the defendant may point to pre-existing conditions or other circumstances that caused the injury, not the breach of duty. In some cases, though, this element can be obvious—like if a surgeon leaves a surgical instrument in the patient (which happens more than you think), that’s a clear line from breach of duty to injury.

Damages

Lastly, the plaintiff must prove that damages resulted from the injury caused by the breach of duty. In some cases, a mistake was made and caused injury, but the damages weren’t significant enough to reward compensation.

Damages are placed into two groups: special and general. Special damages include lost pay or the cost of corrective surgery when needed. General damages are vaguer and include pain and suffering or loss of quality of life. If a malpractice claim can prove these four elements, they will likely be successful and be rewarded compensation or a settlement with the defendant.

The 4 Cs of Medical Malpractice Risk Reduction

Naturally, its in the best interests of medical professionals and practices to reduce risk as best they can. There are many strategies for reducing risk in healthcare, but the core elements are sometimes called the four Cs: compassion, communication, competence, and charting.

Compassion & Communication

Compassion is vital in developing the doctor-patient relationship and avoiding strife that can result in a malpractice lawsuit. One of the most common reasons patients and families pursue litigation is that they felt mistreated or disrespected by the individual—so if a doctor shows compassion and understanding, they’re more likely to receive it from patients and families if a negative result occurs.

Communication is also crucial in avoiding malpractice litigation. For one, proper communication with staff helps avoid mistakes like delayed diagnosis and incorrect prescription drug administration. Communicating with patients and families also helps them understand better what’s happening and why and makes them feel heard instead of ignored.

Competence & Charting

Of course, healthcare professionals must be competent if they want to avoid malpractice litigation. But competence also refers to physicians not going past their area of expertise—consulting with colleagues and referring patients to specialists when needed.

Lastly, charting (or documentation) helps to improve communication and is useful in potential litigation. For one, it provides a written record of everything that’s happened to the patient and gives healthcare professionals the most up-to-date information regarding the patient for quality and safe care.

Conclusion

If you’d like to learn more about medical malpractice liability risk for individuals and practices, our helpful staff is eager to answer all your questions and can help you find the ideal malpractice insurance policy for you.

There are many facets to insurance policies that may confuse those unfamiliar, such as the deductible. If you’re having trouble understanding your malpractice insurance policy’s deductible, let us help with our brief explainer on the basics of malpractice policies and deductibles.

What Is an Insurance Deductible?

What is an insurance deductible, and why is it important to understand? Basically, the deductible on an insurance policy is the lump sum the insured must pay before the insurance carrier begins paying what the policy covers. Typically, the higher the deductible, the lower the monthly premiums, and vice versa.

Insurance Deductible Scenario: If you’re in an automotive accident and your vehicle needs repairs, you must pay the deductible before the insurance policy activates.

In medical malpractice terms, the healthcare professional must pay a set amount before the insurance carrier covers the costs of a settlement or legal fees and court costs. But, as we’ll discuss, the deductible may only be for an indemnity and not cover the legal fees of a lawsuit.

Do Malpractice Insurance Policies Feature a Deductible?

One thing that the insured should understand about their malpractice insurance policy’s deductible is that their policy may not even feature a deductible. A deductible is standard for basic home, auto, and healthcare insurance policies. But malpractice insurance is different, and many policies don’t feature a deductible.

While they’re not as common as they are for home or auto policies, some malpractice insurance policies feature a deductible. The deductible for a malpractice policy can vary wildly from $1,000 to $10,000 or higher, depending on the policy and what it covers.

What’s the Difference Between an Indemnity and Indemnity & Expense Deductible?

Those who decide on a deductible for their malpractice insurance have a choice between an indemnity-only and an indemnity and expense deductible. In an indemnity-only deductible policy, the insured must pay the deductible only if payment of indemnity must be made and the insured is forced to pay a settlement to the plaintiff.

So, if the defendant of a malpractice lawsuit has an indemnity-only deductible policy, they’d only pay the deductible if they lose the case and are forced to pay an indemnity. But an indemnity-only policy does not cover legal costs—an indemnity and expenses policy does. Those insured with such a policy pay the deductible immediately for legal fees.

We hope our guide has helped you understand malpractice insurance deductibles a little better. As a medical malpractice insurance agency, we understand every facet of malpractice insurance and are always happy to help those looking to learn more. Contact our helpful staff today if you have further questions or are interested in purchasing an insurance policy.

When it comes to insurance, especially malpractice insurance, there are many aspects of the policy that the insured individual should be familiar with. One of the most important components of any insurance policy is the deductible.

Malpractice insurance deductibles are different than the typical deductibles found in other policies, such as those for home or car owners. Below, we’ll explain everything you need to know about malpractice insurance deductibles, from how they’re structured to the options available.

What Is an Insurance Deductible?

First, consider the basics of deductibles and insurance policies. Deductibles are common parts of many insurance policies, whether healthcare, homeowner’s, or auto insurance. An insurance deductible is the specified amount an insured pays toward their insured loss.

The deductible is a lump sum the insured pays the insurer if the policy and coverage are activated. To use the example of auto insurance, if the insured has a $500 deductible insurance policy and gets in an accident that causes damages in the amount of $5,000, the insured would be responsible for paying the $500 before the repairs can be made or reimbursed for $4,500 for the repairs minus the deductible.

Does Every Malpractice Insurance Policy Carry a Deductible?

While deductibles are standard on most homeowner’s and auto insurance policies, they’re not typical with malpractice and professional liability policies. Since malpractice insurance differs from other types of insurance and covers different costs, most policies don’t include a deductible.

Many policies will carry a deductible option, but it’s not mandatory unless the individual is joining a group malpractice insurance policy where the deductible is required. Those seeking individual malpractice insurance policies will likely have the option of having a deductible. And while the deductible may be a substantial lump sum, a higher deductible could mean lower premiums, so it is worth considering.

How Are Malpractice Insurance Deductibles Different?

Malpractice insurance is already quite different from other forms of insurance regarding deductibles, but they’re also structured differently. While deductibles for most insurance policies, like auto and home coverage, must be paid immediately to activate policy coverage, malpractice deductibles are slightly different.

Individuals looking for malpractice insurance have two options regarding deductibles—indemnity-only or indemnity and expense. Both deductible types are fairly common, but they do have distinct characteristics.

Indemnity-Only Deductibles

An indemnity-only deductible, otherwise known as loss-only, is a deductible that is only required when the insurance provider pays an indemnity. An indemnity is compensation for damages or losses agreed upon in a settlement or levied on the defendant by the court.

If there is no indemnity, where the claim is either dismissed or resolved in favor of the insured defendant, then the insured wouldn’t have to pay the deductible at all. An indemnity-only deductible is only required when a settlement is agreed to or the lawsuit is resolved.

Consent-to-Settlement Clause & Deductibles

Those with an indemnity-only deductible should also consider a consent-to-settlement clause in their insurance policy. A consent-to-settlement clause is a provision that requires the insurer to seek the insured’s approval before settling a claim. While this clause is common in many policies, it’s not standard and shouldn’t be assumed by the insured.

Those with an indemnity-only deductible would naturally want to consent to a settlement, as that’s when the indemnity-only deductible would activate and they’d have to pay a large sum. Without the clause, there’s an incentive for the insurer to agree on a settlement to resolve the claim and activate the indemnity-only deductible.

Indemnity & Expense Deductibles

The other type of deductible in malpractice insurance is indemnity and expense. While the deductible covers the indemnity—should any be paid—it also covers other expenses, like court and legal fees.

It doesn’t matter if an indemnity has been reached yet; most indemnity and expense deductibles are required immediately once the claim is filed. The indemnity and expense deductible is typically more common than an indemnity-only deductible if the policy has any deductible at all.

Which Malpractice Deductible Is Best for Me?

Choosing which deductible is best for you and your insurance policy will primarily come down to your preferences. Each deductible type has its advantages, as an indemnity-only deductible is paid only when the claim is resolved and may not be paid at all if the claim is dismissed or resolved in favor of the defendant.

However, indemnity-only deductibles are typically higher than indemnity and expense deductibles, which must be paid immediately to cover legal costs like lawyer and court fees. One type of deductible may also yield a lower policy premium, so you should carefully weigh each deductible’s pros and cons before deciding.

How Much Should I Pay for My Malpractice Insurance Deductible?

One of the most common questions that many searching for new malpractice insurance policies ask is how much they should pay for a deductible. The price of a malpractice policy deductible depends on numerous factors, including the individual’s risk factor. Some medical professions have inherently higher risk factors and are more likely to have higher premiums or deductibles for coverage.

Some malpractice deductibles are as low as $1,000, while some are as high as $25,000 or more. Keep in mind, a higher deductible typically means a lower premium and vice versa. Those shopping for a new malpractice policy should decide if they’re more financially capable of paying a higher monthly premium or greater lump sum for their coverage.

How Do I Find Suitable Malpractice Insurance?

If you’re ready to find a malpractice insurance policy that best fits you, Baxter & Associates can help. Baxter & Associates provides professional liability insurance for many medical professions, from CRNA medical malpractice insurance to group insurance policies for healthcare facilities.

Some examples of the medical professions we serve as malpractice insurance brokers include:

• Doctors
• Dental professionals
• Podiatrists
• Chiropractors
• Nurse practitioners
• Physician assistants and more

As a national insurance broker with decades of experience, we’ll help connect you with a policy that’s ideally tailored to your situation, whether you know exactly what you want or if need help finding the right policy. Contact our helpful staff at Baxter & Associates, and we’ll ensure that you’re sufficiently covered in the case of a medical malpractice claim.