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What is Malpractice Insurance?

Even the most dedicated professionals make mistakes. Unfortunately, negligent errors can end up costing a medical professional millions of dollars if they injure or possibly even cause the death of a patient. This is where malpractice insurance comes in.

Malpractice insurance is a type of professional liability insurance which pays compensation to victims injured negligently during care. If a doctor or other medical professional faces a medical malpractice claim, then insurance can protect their individual assets.

Who Purchases Malpractice Insurance?

Any medical professional should carry insurance. Doctors in Pennsylvania effectively need to carry malpractice insurance, which is a condition for participating in the state’s Medical Care Availability & Reduction of Error Act fund. A doctor who does not comply could be reported to the licensing board. Other health care professionals such as nurses, physical therapists, and psychologists can also protect themselves by carrying a policy.

Doctors can buy insurance individually or as part of a group. If a professional is an employee of a hospital, then the hospital typically purchases insurance.

What Does Malpractice Insurance Cover?

Malpractice insurance typically kicks in if the insured is sued for negligent care. It does not cover all lawsuits, such as claims for tampering with a patient’s records or for sexual assault or harassment. In most cases, it applies whenever a covered professional is sued for failing to provide adequate care or to obtain informed consent. Think mistakes like missed diagnoses, prescription drug errors, and improper surgery.

The insurance can pay for the cost of defending the lawsuit, which can include court costs and attorneys’ fees. It might also cover the cost of arbitration or other alternative dispute resolution techniques. These costs are often prohibitive and could bankrupt a doctor.

If the defendant is found liable for the injury or death, then insurance can cover the settlement or jury verdict, including compensatory and punitive damages, up to the policy limit.

How Does Insurance Protect Doctors and Patients?

For the doctor, insurance can protect his or her personal assets, like a home or investment account. These assets might be vulnerable if a patient wins a lawsuit and seeks to seize or sell assets. Malpractice policies usually have high policy limits, so patients should receive a fair amount if they are injured.  Currently, a policy in Pennsylvania must have a $1,000,000 policy limit per claim, up to $3,000,000 per year in aggregate claims.

Patients are also protected when doctors have insurance. It is easier to get a payout from an insurer than to personally identify and try to seize or force a sheriff’s sale on a doctor’s personal assets. Insurers also have a duty of good faith, which requires that they promptly investigate claims.

Can a Philadelphia Medical Malpractice Attorney Help?

Yes. If you have been injured by a doctor or other professional, then a seasoned lawyer understands the claims process, including what evidence insurers want to see when considering a claim. Anyone who is unrepresented by legal counsel might feel pressure to immediately agree to a settlement, which could be for less money than the claim is worth.

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