As a broker of medical malpractice insurance for physicians, we are often asked how the Medical Malpractice insurance carriers calculate the cost of a med mal policy. The truth is, every physician is individually underwritten and there are many factors that go into the equation. Following are a few of the most important factors that are always considered when pricing medical malpractice insurance:
- Specialty – For example… the risk of insuring a surgeon is considered to be higher than it would be for a primary care physician. Typically, the higher the risk, the higher the premium.
- Venue – Where is the physician practicing {city, state}? Medical Malpractice Insurance Premiums are very dependent on the local tort laws and legal environment. Generally speaking, physicians practicing in major metropolitan areas tend to pay more than those practicing in rural areas.
- Claims – A physician with a claims history that includes payouts will almost always pay more for their medical malpractice insurance than a physician that is claims free.
- Limits – Premium rates are dependent on the limit of liability. There are often requirements (from the state and/or a hospital) that will dictate what the limits need to be.
- Coverage – Is the physician looking to cover prior acts? If so, it obviously costs more to include prior acts coverage back to a retroactive date than it would to insure the acts of a physician only going forward.
- Policy – There are two types of policies that are most typical in the medical liability insurance world… Claims Made and Occurrence. Occurrence coverage is usually more costly. Doctors should make sure they understand what type of policy they have and what the differences are.
Medical malpractice insurance is one of the years largest business expenses for many physicians practices. Working with a broker that specializes in medical liability insurance makes sense to insure that the physician (and their corporation) are properly covered… and that they are getting the best possible deal.
