Issue: Medical professional liability insurance, sometimes known as medical malpractice insurance, is a type of professional liability insurance that protects physicians and other licensed health care professionals (such as dentists and nurses) from liability associated with wrongful practices resulting in:

• Bodily injury.
• Medical expenses.
• Property damage.

It also protects them from the cost of defending lawsuits related to such claims.

Overview: A medical professional liability insurance policy covers bodily injury or property damage. It also covers liability for personal injury such as mental anguish. The complexity involved in discovering negligence results in a higher percentage of premium dollars going toward defense and cost containment (DCC) expenses. Medical liability insurers spend large sums of money investigating and defending claims where there is an adverse patient outcome not resulting from negligence.

There are two basic types of malpractice insurance:

• Claims-made: Many insurers write on a claims-made form basis where a policy in effect at the time a claim is reported responds for the loss, while the policy remains in force and during any applicable extended reporting period.
• Occurrence-made: This policy was more popular in earlier times. It covers a loss that “occurs” during the policy period, regardless of when the claim was made, and even after the policy has been canceled.

The medical professional liability insurance market has occasionally experienced times of crisis, such as during the late 1990s, leading to high prices for policyholders. These times were marked by:

• Volatile changes in premium.
• Declines in investments.
• Rapidly increasing loss ratios because of increases in claims payments and DCC expenses.
• The development of a large reserve deficiency.

Information from: naic.org

2024-09-16 10:32:55