Medical liability insurance is essential for anyone working in patient care to protect against malpractice lawsuits. If you need to buy malpractice insurance, ask yourself these questions first to get a policy that best fits you.

Do I Want a Consent-to-Settlement Clause?

Some people are surprised to learn that the decision to settle can be taken out of their hands in a malpractice case. That’s why a consent-to-settlement clause is important in a malpractice policy.

A consent-to-settlement clause means that the insured must consent to a settlement before it is approved and accepted by the insurance carrier. Without the clause, the insurance carrier is free to settle with the plaintiff if they feel it’s a fair arrangement and in their best interests—without the insured’s approval.

Do I Want an Occurrence-Based or Claims-Made Policy?

Before buying malpractice insurance, one of the first questions to ask yourself is whether you want an occurrence-based or claims-made policy.

An occurrence-based policy covers the insured for any incidents of malpractice claims made when the policy was active, even after the policy has expired. So, if you have an occurrence-based policy for three years and then it expires, you’d still be covered for those three years the policy was active, even if it lapses.

A claims-made policy only covers incidents that occur when and while the policy is still active—if it expires, so does your coverage. Claims-made policies are much more common because they’re more affordable.

How Much Coverage Do I Need?

Naturally, you want to ask yourself how much coverage you need and what you can afford. Some malpractice policies only cover settlement costs, and the insured is left to pay for the legal and defense costs of the malpractice claim.

Some policies may cover all the defense costs, but they have a settlement and liability cap—which means they’ll cover everything up to a certain limit and nothing else after. Weigh the pros and cons of your coverage and gauge what you can pay regarding monthly premiums and deductibles.

What Kind of Deductible Can I Afford?

You’ll want to consider how much of a deductible you can afford and how that can lower your monthly premiums. Not every malpractice policy comes with a deductible, but keeping monthly premiums down is generally a good idea.

Malpractice deductibles come in two forms: indemnity-only and indemnity and expenses. Indemnity-only deductibles mean you only pay the deductible when an indemnity is reached. On the other hand,  an indemnity and expenses plan requires the deductible to be paid immediately to cover legal costs. 

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