Malpractice insurance is essential for those working in healthcare or in high-risk fields, such as law. But purchasing liability insurance isn’t as easy as picking it up at the store, and there are many factors to think about before buying.
If you’re in the market for malpractice insurance, we’ve compiled some important things you should consider before purchasing.
1. Individual vs. group policies
Malpractice insurance comes in two forms: individual and group policies. If you run a medical facility, you’ll get a more affordable rate and policy more suited to your needs if you insure all the employees and facilities together instead of having numerous individual policies.
If you’re an individual, you may choose to either join the employer’s group policy or pay for your own coverage. Note that some facilities may require employees to join the group policy and disallow individual coverage, though. A group policy is typically more affordable to the employer and employee but isn’t tailored to the individual and may not be as comprehensive as an employee wants.
2. What the policy covers
Before purchasing malpractice insurance, you should consider what the policy does and does not cover. In insurance policies, the devil is in the details, so always read the fine print before signing on the dotted line.
Before committing to an insurance policy, you should know all the basics and fine details of your coverage, such as whether the malpractice insurance covers defense costs. Also, be able to answer questions like:
- Does my policy have a hammer clause?
- Does my policy cover me if I work outside my workplace?
- Does my policy have an extended reporting period?
- What’s the cost limit of my insurance policy?
You don’t want to wait until you need it to find out what your insurance does and does not cover.
3. Level of risk
Before you pay for malpractice coverage, you’ll also want to gauge the level of risk you face at your position. In the healthcare field, practically every position carries some risk, as there are always risks when dealing with patient injuries and illnesses.
But if you frequently deal with at-risk patients, you’ll want more coverage than positions with less risky patients. More coverage is always the safer choice, but you don’t want to pay excessive premiums for coverage if you’re at a low level of risk.
4. Occurrence vs. claims-made policies
Lastly, every individual seeking malpractice insurance should weigh the pros and cons of occurrence and claims-made policies. Occurrence coverage will protect the insured against any claims that occurred during the policy period—regardless of whether the policy is expired or not.
Claims-made coverage requires the policy to be active and for the incident to have occurred when the policy was active for coverage to apply. While occurrence policies are more comprehensive, they’re typically more expensive, so claims-made policies are much more common.