Medical Malpractice News

How Deductibles Are Structured On Medical Malpractice Insurance Policies

Tags: | Comments: 0 | January 19th, 2011

Many insurance carriers offer deductibles on medical malpractice insurance policies in today’s market. Many doctors may not realize that there is more to a deductible than just the dollar amount. Many policies do not carry a deductible, but it is almost always an option. Generally speaking deductibles can be $2,500, $5,000, $10,000 or even more. Deductibles on the high end of the spectrum (say $10,000 and above) may require a letter of credit from a financial institution to ensure that should a claim arise, the physician or surgeon will have funds available to pay the deductible payment.

Differences Between Medical Malpractice Insurance Deductibles

As I alluded to above, there is more to consider with a deductible. Most importantly, under what circumstances would you actually have to pay the deductible? Some policies will have a deductible called an “Indemnity Only” deductible, whereas other policies will have “Indemnity and Expense” deductibles. An “Indemnity Only” deductible means that you only pay the deductible if an actual indemnity payment is made on your behalf. However, if you were carrying an “Indemnity and Expense” deductible, you would be responsible for paying the deductible as soon as expenses are incurred defending the medical malpractice claim, regardless of whether there is an indemnity payment or not.

Let’s Look At An Example of a Medical Malpractice Insurance Policy

Say you are sued for malpractice, and you have a $5,000 “Indemnity Only” deductible on your medical liability insurance policy. Even if it takes $100,000 dollars to defend your case, as long as there is no actual indemnity paid, you will not have to pay any deductible expense. However, in the same scenario, if your policy had an “Indemnity and Expense” deductible, your deductible would be triggered right away, and in this case, you would pay the full amount, because the $5,000 would go towards expenses to defend your claim.

It is important to know what you are responsible for in the event of a claim, so be sure to consider this information when purchasing medical malpractice insurance.