Medical Malpractice Insurance

Information verified correct on October 22nd, 2016

What does medical malpractice mean?

Medical malpractice refers to the negligent treatment by a healthcare practitioner that causes injury, harm or death to a patient. Healthcare practitioners such as doctors and nurses have a duty of care to their patients. When they fail to provide a reasonable standard of care, they may be guilty of medical malpractice. Negligent medical treatment refers to more than simple mistakes, in order for treatment to be considered negligent, the patient must meet a certain threshold of injury. If a patient is seriously injured or if their condition has worsened as a result of substandard care, the medical practitioner is professionally liable. Medical malpractice and negligence most commonly due to error. Typical cases include administering the wrong medication, failing to warn a patient about the risks of a treatment and inaccurately reporting the results of diagnostic tests. Medical malpractice has occurred when a healthcare provider’s failure to provide a reasonable standard of care causes harm to a patient.

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What can happen if there is medical negligence?

If a patient believes they have been harmed or injured due to substandard care, they can seek financial compensation from the health practitioner. Depending on the injury sustained, the patient can claim the following types of compensation:

  • General damages. This refers to compensation for the pain and suffering endured by the patient as a result of medical malpractice. It includes financial recompense for a lower life expectancy, reduced enjoyment of life and reduced faculties.
  • Future loss of earnings. A patient can claim compensation for the earnings they would have received if not for the injury or harm caused by medical negligence.
  • Past loss of earnings. If a patient has been unable to work because of the injuries or harm they experienced due to medical negligence, they can claim damages for the earnings they lost in this period.
  • Exemplary damages. A healthcare practitioner guilty of medical malpractice may also face additional damages as a form of punishment. This typically occurs when the practitioner’s actions have caused grievous harm and in cases where there is a high degree of recklessness.
  • Special damages. This compensation applies to the past and ongoing cost of medical treatment the patient will need for rehabilitation. It includes related expenses such as in-house care and home modifications that are required as a result of the injuries.
  • Griffith V Kerkemeyer damages. A patient can claim on behalf of friends and family who provide gratuitous services for their care.

Why having medical malpractice insurance is important?

Medical malpractice insurance provides important coverage in the event of a medical malpractice claim. Claims can be financially devastating for medical practitioners. A claim can result in expensive compensation payouts as well as the additional costs associated with legal fees and disruption to business. If you are a health professional it is important to be prepared in case a claim is made against you.

Healthcare providers must also be aware of the risk of medical negligence outside the workplace. For example, if a nurse is out to dinner and treats someone going into cardiac arrest at the restaurant, they are liable for damages if they lacked the proper training to help the person. In this case, given the nurse acted outside the scope of their employment, the cost of legal representation is borne by them and not the hospital where they were employed. With medical malpractice insurance, the cost of legal representation and compensation is covered. Medical liability insurance is important because it protects you in and out of the workplace, provides financial support to cover legal fees, covers the cost of compensation and allows you to help patients without worrying about the potential legal risks of your actions.

Who can use medical malpractice insurance?

Medical malpractice insurance can be used by a broad spectrum of healthcare professionals and centres. Those covered include:

Doctors and surgeons

If you are a medical student, a doctor employed in hospital, a specialist, a surgeon, or a GP, you are eligible for medical malpractice insurance. This cover also is extended to retired doctors. A doctor who retires is able to apply for “run-off” insurance to be protected against claims made for past incidents that have not yet been reported.

Note: Even if you are a doctor employed at a hospital, you should take out medical malpractice liability insurance just in case you are not covered by the hospital’s insurance policy.

Medical clinics

A medical clinic is at high risk of medical malpractice claims. A small failure in standard protocol such misdiagnosis and patient privacy breaches can result in multiple claims.

Clinical trials

A clinical trial comes with great risk of medical malpractice claims. If a patient believe they were not sufficiently warned about the possible side effects of the trial, the owners of the trial may be held professionally liable. In these situations, medical malpractice insurance can provide protection.

Pathology laboratories

Medical malpractice insurance can be used by pathology laboratories to protect them from potential negligence cases due to misreporting diagnostic results, delays in testing samples or failure to follow proper diagnostic procedure.

What are the common features of medical malpractice insurance?

Medical malpractice insurance provides comprehensive coverage to both healthcare professionals and healthcare establishments. Common features of a medical malpractice insurance policy for an individual includes coverage for the following:

  • Civil liability. This provides cover for claims against the healthcare service provided for example breeches in patient privacy.
  • Vicarious liability. If a medical practitioner or locum doctor commits an error or omission, medical malpractice insurance will provide cover for the damages.
  • Statutory liability. This feature covers the defence costs for proceedings brought under OH&S or environmental law. It also provides cover for any fines or civil penalties imposed on the healthcare practitioner.
  • Public relations expenses. To help protect the health professional reputation, medical malpractice insurance will typically help pay for the cost of the public relations expenses needed to counter negative press.<
  • Medicare fraud. For damages relating to a professionals fraudulent and dishonest claim of Medicare benefits.
  • Court attendance and advancement of claim investigation costs. For healthcare establishments, a typical medical malpractice insurance policy will include cover for civil liabilities, Good Samaritan acts, fundraising and social activities, investigation costs, loss of and property damage claims. For a private practice, most policies will offer up to $20 million to cover civil liabilities.

How much medical malpractice insurance is enough?

The amount of medical malpractice needed depends on the specific needs and circumstances of the individual and establishment. To decide how much medical insurance is enough, it is important to consider the risk of a medical malpractice claim and how much the potential financial damages would be. As a healthcare professional or establishment owner, you need enough insurance to cover any monetary settlements that would arise from a medical malpractice claim. When making a decision it is also useful to understand coverage and annual limits. For example, a $1,000,000/$5,000,000 policy limit will give you a maximum claim payment of $1,000,000. Under this policy, you can online claim the payment five times in one year. Given compensation from medical malpractice claims are often in excess of this amount, it is advisable to choose a policy with a high limit.

Frequently Asked Questions about medical malpractice insurance

Q. What is medical malpractice insurance?

  • A. Medical malpractice insurance is a policy that covers doctors and other allied health professionals for the expenses that arise in medical malpractice claim.

Q. What is medical malpractice?

  • A. Medical malpractice refers to an incident where a healthcare professional or establishment has failed in its duty of care to a patient and caused increased suffering, injury or death.

Q. Who is covered by medical malpractice insurance?

  • A. Medical malpractice insurance provides cover for financial compensation, legal representation and additional associated expenses that arise in the event of a medical malpractice claim.

Q. Why is medical malpractice insurance important?

  • A. Health professionals are exposed to many litigation risks both in and outside the workplace and must be protected against the expenses of a medical malpractice claim. In addition to the financial compensation needed, there is the additional cost caused by disruption to work and loss of reputation.

Q. What is the typical settlement for a medical malpractice claim?

  • A. This type of claim can have serious financial repercussions with compensation often in excess of one million dollars.

Q. What must I consider before purchasing medical malpractice insurance?

  • A. Before deciding on a policy, you should consider the annual limit and coverage limit. A policy with a higher coverage limit will typically provide better protection from the expenses of a medical malpractice claim.

Medical malpractice insurance is an important policy to consider if you work in the healthcare sector. It covers a broad range of health professionals from the costly effects of a medical malpractice claim including legal expenses and financial compensation. These claims can arise from negligence and human error and it is crucial to be prepared in the event one is made against you.

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2 Responses to Medical Malpractice Insurance

  1. Default Gravatar
    jennifer | April 20, 2015

    Should a hairdresser have medical malpractice insurance?

    • Staff
      Richard | April 21, 2015

      Hi Jennifer,

      Thanks for your question. Medical malpractice insurance is for medical professionals.

      I hope this was helpful,

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