Becoming a healthcare professional is perhaps one of the most rewarding career paths to tread. However, the responsibility you have can feel overwhelming, so you’re looking for a way to ease your mind and give you the confidence to provide the best care imaginable.
Well, you’ve come to the right place — we’re sharing everything you should know about malpractice insurance coverage, including how to get the best policy for you and your practice.
In the following sections, we’ll discuss everything from the definition of this policy type, the types of malpractice insurance, the specific coverage areas, and so much more. After reading, follow our easy-to-understand four-step process for acquiring the malpractice insurance you need.
What Is Malpractice Insurance Coverage?
Malpractice insurance is a package that ensures financial protection for those working in the medical profession during lawsuits or claims related to their job. For example, it covers costs of misconduct allegations, treatment-related injuries, errors and omissions, and injuries from equipment.
The Types of Malpractice Insurance Coverage
There are two main types of malpractice insurance coverages offered by most insurers — occurrence and claims-made.
Occurrence Malpractice Insurance Coverage
With this type of malpractice insurance policy, you are covered for claims made on treatments that happened while the policy was alive, even if it’s currently expired.
It means you can make insurance claims several years or more after the policy ends. Of course, you need evidence that the triggering event occurred during the policy’s lifetime.
Claims-Made Malpractice Insurance Coverage
Claims-made policies only cover claims if both the treatment and the lawsuit happen during the policy’s active life. It’s the most popular option of the two when it comes to business insurance of any kind.
What Does Malpractice Insurance Cover?
The specifics of all malpractice insurance policies vary depending on the nature of your healthcare facility or service. However, they generally cover legal costs and damages associated with the following areas:
- Failure to diagnose
- Errors and omissions while performing professional duties
- Incorrect dosage or prescription
- Delay in referral
- Physical harm to a patient and treatment-related injuries
- Providing substandard treatment
- Operating on the wrong part of the body
- Unnecessary surgery
- Lack of informed consent
- Failure to inform, communicate, or monitor
- Mental suffering of a patient due to a procedure or consultation
- Pressure ulcers
When medical malpractice claims occur, a distinction must be made between negligence and dissatisfaction from a patient.
Often, lawsuits and claims come with reputational harm for you (i.e., the healthcare provider), which causes financial losses. We can help find you a malpractice insurance policy that covers the restoration costs to improve your company’s image and reputation following defamation and negative publicity.
What Doesn’t Malpractice Insurance Cover?
Some occurrences aren’t covered under the majority of malpractice insurance policies. You should always check your individual insurance policy to find the specifics. However, the main areas of exclusion tend to be the following:
- Sexual abuse
- Hospital administration issues (i.e., the hospital is liable for losing patient data)
- Illegal acts, such as assisted suicide
- Reckless or deliberate acts that disregard the safety of a patient
- Misrepresentation on insurance applications
- Cost guarantees or price estimates
- Alteration and falsification of medical records
Malpractice Insurance Claims Examples
Real-world examples work to realize the importance of malpractice insurance and the kinds of scenarios it can protect you and your practice from.
Example One: Negligence Claim
Your shift is particularly busy, so much so that you accidentally mislabel and give the wrong prescription to your patient, Sally. Unfortunately, Sally suffers a severe reaction to the incorrectly prescribed medication.
Afterward, Sally sues you for negligence. Thankfully, you took out malpractice insurance coverage which pays the legal expenses and medical fees incurred due to the adverse reaction. The total cost was $50,000. Without the policy, you would need to pay the $50,000 out of pocket.
Example Two: Emotional Distress Claim
You run a physiotherapy practice. After Ben, your employee and licensed physiotherapist, conducts a session with Charlotte, a patient, Charlotte accuses Ben of touching her inappropriately.
In the lawsuit, Charlotte cites your practice’s name in the lawsuit claiming emotional distress. The malpractice insurance coverage you purchased pays the monetary judgment and legal fees totalling $102,000.
Example Three: Neglect Claim
When reviewing your client’s (Sam’s) health history, you didn’t notice an injury. Thus, you’ve recommended treatment to Sam that could exacerbate the previous wound.
Since Sam proceeds with the treatment, he sues you for neglect. Luckily, your malpractice insurance covers the legal costs and medical expenses totalling $47,000.
Who Needs Malpractice Insurance Coverage?
If you’re a medical practitioner who offers professional health services to members of the public, you should think about purchasing a malpractice insurance policy. In fact, many healthcare professions and medical associations or colleges require such insurance to legally practice in Canada.
To give you an idea of the professions needing malpractice insurance coverage, take a look at the list below:
- Doctors and nurses
- Medical assessment centres
- Medical spas
- Massage therapists and physiotherapists
- Counsellors, social workers, and occupational therapists
- Speech pathologists
- Home healthcare providers
- Opticians and optometrists
- Paramedics, first-aid providers, and EMTs
- Diagnostic imaging clinics
- Care facilities (including retirement, long-term care, palliative care, and assisted care)
- Clinics (including family medicine, mental health, urgent care, walk-in, and pain management)
- Weight loss clinics
- Telehealth professionals
- Yoga instructors
- Health and wellness practitioners, including Reiki practitioners
- Pilates instructors
- And more
In short, if you provide any service that necessitates a physical assessment, rehabilitation, treatment, or diagnosis, you need malpractice insurance coverage.
How Much Does Malpractice Insurance Coverage Cost?
On average, malpractice insurance costs around $7,500 per year for non-surgical practitioners. However, as a surgeon, you may pay anywhere from $30,000 to $50,000 per year. Often, it works out to be roughly 3.2% of the professionals’ incomes.
The cost of malpractice insurance coverage dramatically varies based on your profession and the services you offer. But aside from those, the following factors affect the price of your premium:
- Your experience and qualifications — Most insurers believe that the more experience you have in your field, the less likely you are to make mistakes. Therefore, the longer you have worked in your professions, the lower your malpractice insurance coverage premium will be.
- Your specialty — Some practices come with more risks than others. In the world of malpractice insurance, your services are categories into three categories — namely, no surgery, minor surgery, and surgery. If you belong to the last two types, you often see higher premiums as you’re more likely to experience claims. Generally speaking, these specialties include:
- General surgeons
- Plastic surgeons
- Emergency room doctors
- Cardiovascular surgeons
- Orthopedic surgeons
- The number of employees in your facility — While not every insurer pays as much attention to the number of people employed at your company, some may. Those that consider this metric state that the more people you employ, the higher the chance of them making mistakes. If you have multiple employees, be prepared for a higher malpractice insurance coverage premium.
- The location of your practice — Some provinces in Canada come with higher insurance rates. Therefore, the location of your practice plays a considerable role in the total cost.
- Your annual and projected revenue — The more money your business makes, the more there is at stake during a lawsuit. A patient may ask for more compensatory money when they know your income can sustain such a high price.
- Your working hours — The longer you work and the more patients you see, the more likely you are to produce an unfavourable outcome. Overworked physicians are more prone to mistakes, increasing the malpractice insurance coverage price.
- Your claims history — This plays a major role in determining your malpractice insurance premium. If you have a long list of serious insurance claims behind you, insurers raise the cost as you’re deemed a higher risk than others. However, if your previous claims are less severe, you may benefit from a lower monthly cost.
How to Get Malpractice Insurance Coverage
A lot goes into calculating how much malpractice insurance coverage you should purchase and where to find the best deals. So, letting us at LiabilityCover do the hard work for you puts your mind at ease by helping you obtain the correct cover in record time for the perfect price.
Our process is simple, as you can see from the four steps below:
- Submit a request using our secure online insurance quote form.
- We review your insurance requirements.
- We connect you with a licensed insurance broker or agent that has extensive experience providing insurance for medical and healthcare providers.
- Finally, your assigned broker or agent contacts you to help guide you through the application process and attain the malpractice insurance coverage you require.
Is Malpractice Insurance Coverage On Its Own Enough?
As a healthcare professional, malpractice insurance is definitely one of the most important coverages. However, it may not be the only one you need to ensure complete protection.
We suggest considering additional policies like the below to protect you and your practice should the unthinkable occur:
Cyber liability insurance coverage is a must-have if you store any kind of sensitive information on a digital system or use any form of software at your practice.
The policy covers the damages and legal costs related to cybercrime involving patient or customer data and technology systems, such as:
- Legal, forensic, and breach management costs — Coverage for notification fees, crisis management services, legal advice, and credit monitoring.
- System damage and restoration fees — Coverage extends to the repairs and restoration of the software systems damaged during a cyber event.
- Incident response costs — It covers the cost of anytime access to cyber incident response hotlines. Plus, it pays for a team of professionals to help you coordinate the cybercrime response.
- System business interruption — If your system outage results in financial losses for your practice, the policy compensates your business.
- System engineering — It’s an optional coverage that covers your practice if your employee is tricked into transferring money to a fraudulent bank account or unwittingly grants system access to a scammer.
Keep in mind that it doesn’t typically cover you for losses or damages from:
- One of your employees hacking or damaging your data or systems
- A power surge or failure resulting in system damage
- Patent or IP infringement
Commercial property insurance offers financial coverage for damage and physical loss to your property and the contents after an external disaster. Depending on your insurer, it might be named commercial building insurance, business property insurance, commercial rental insurance, or business contents insurance.
Typically, the policy includes coverage on the areas listed below (although the specifics vary from policy to policy):
- Inventory — The coverage extends to replacing or repairing your inventory and merchandise. It includes food items stolen or damaged in fires, floods, or thefts.
- Tenant Improvements — All immovable improvements made by you as a tenant are covered. It includes elements like lighting, wall paint, and carpeting.
- Equipment, furnishings, and fixtures — The policy funds the replacement or repair of fixtures and fittings.
- Electronics — If your electronics are stolen or damaged, your commercial property insurance pays to replace or repair them.
- Building — It provides the money to replace or fix damage to a property you own if it was affected by an unforeseen phenomenon like a fire or flood.
It won’t cover items that mysteriously go missing and can’t be explained, nor will it extend to vacant properties or general wear and tear. With that said, it’s highly beneficial and can save you a lot of money should the unspeakable occur.
If part of your practice involves recommending, selling, distributing, or manufacturing physical products (like creams or herbal remedies, for example), you should consider taking out product liability insurance coverage.
It covers you against claims alleging third-party bodily injury or property damage caused by a product you sell, distributes, or manufacturer. Scenarios like incorrect labelling, design damages, and insufficient safety warnings are covered.
Even if you sell your products solely online, product liability coverage still applies. Why? Because you and your practice can still be held liable for third-party damages or injury incurred by an e-commerce sale.
The cost of your product liability insurance depends on a multitude of factors, including:
- The volume of products you sell
- Your claims history
- The coverage limit you choose
- The type of product and related risks (If you’re selling, manufacturing, or distributing healthcare products, the associated risks are rather high, increasing the price of your premium.)
- Your annual and forecasted revenue
Unforeseen events can force you to close your practice temporarily. General insurance policies won’t compensate you for the potential loss of income during this time, but that’s where business interruption coverage comes into play.
In addition to the lost income recovering, the insurance policy might also extend to paying for overhead costs to keep your business operating, such as rent.
Depending on your coverage specifics, the policy isn’t triggered until 12 to 24 hours of your business closure. Make sure you read the terms of the coverage thoroughly to understand when your compensation begins.
Note: Business interruption insurance isn’t a standalone policy. Instead, it tends to be a section of commercial property insurance coverages we talked about above.
Do you and your practice use vehicles as part of providing healthcare services (i.e., private ambulances, first aid cars, door-to-door prescription delivery, etc.)? If so, you need commercial auto insurance on top of your malpractice insurance coverage.
The specifics and optional coverages are similar to personal car insurance. But the cost of the policy depends on the following factors:
- How far you drive for work purposes — The further you drive, the more likely you are to have an accident, raising the cost of your premium.
- Your driving record and experience — If you have a lot of experience behind the wheel, you benefit from lower commercial auto insurance costs.
- Your gender and age — Similar to personal car insurance, your gender and age can affect the price.
- The type of vehicle you wish to insure — Some vehicles are considered riskier than others. The price of fixing the automobile plays a major role in your premium price too.
- Where you park your vehicle — Driveways and covered parking are safer than parking on the street, lowering your monthly or annual premiums.
Hiring lawyers isn’t just daunting, but it’s expensive too. With legal expense insurance, you don’t have to worry about high fees or worry about finding a reputable lawyer for common problems.
The coverage provided by the policy relates to the following:
- Tax protection — You receive legal advice if you want to appeal a decision made by the CRA (Canada Revenue Agency).
- Employment dispute — Coverage for legal advice and defence if a current or former employee decides to file a lawsuit against your practice.
- Debt recovery — If a client or supplier doesn’t pay an owed amount or adhere to their end of the contract, legal expense coverage gives you the money to chase them.
- Statutory license protection — The policy provides legal representation if a license you need to conduct business and provide healthcare services is revoked, altered, or suspended.
- Bodily injury — If a third-party causes physical harm to you or an employee, it covers the legal costs.
- Property protection — It gives you the money to pursue legal action following damage to your clinic, practice, or other business premises.
Why Choose LiabilityCover?
In the healthcare industry, lives are constantly on the line. So, not only are you short on time, but you need to be able to put complete trust in your insurer.
Here at LiabilityCover, we work tirelessly to connect you with insurance brokers and agents with extensive experience providing policies to healthcare professionals like you. Just tell us about you and your practice, and we’ll do the hard work.
We work with only the highest quality insurers, enabling you to rest easy knowing your practice is protected. Don’t let your lack of insurance limit your opportunities in the healthcare sphere. Put the pressure on our shoulders instead by allowing us to find you the perfect provider!
Use our secure online quote form or give us a call to get started. We’ll sort your insurance needs out in record time.
Frequently Asked Questions
What Is The Difference Between Personal Injury and Medical Negligence (i.e., Medical Malpractice)?
Medical negligence is a type of personal injury. Claims of the latter deal with a variety of situations where the claimant experiences injury due to an incident that wasn’t their fault (like slips and falls).
On the other hand, medical negligence claims deal with mistakes or carelessness from a medical professional only. Such circumstances are typically more complex and thoughtfully analyzed.
What Is Deemed as Medical Malpractice (Medical Negligence)?
Medical negligence is a breach of duty by a health professional that causes loss or harm to a patient or client. It comes in a variety of forms, including surgery mistakes, incorrect treatment, misdiagnosis, and delay in giving treatment.
What Is The Difference Between Professional Liability Insurance Coverage and Malpractice Insurance Coverage?
Malpractice insurance coverage is a form of professional liability coverage that works to protect medical practitioners from lawsuits related to negligence.
What Should You Know Before Signing a Malpractice Insurance Coverage Policy?
As with any insurance policy, you need to know the details before signing any paperwork. Here are some tips to keep in mind when obtaining malpractice insurance coverage:
- Check with your employer to determine whether you’re already covered through the practice’s group coverage. If you are covered, check the specifics. You might still need an extra malpractice policy to protect you completely.
- Know the coverage period so you understand which type of insurance you’re buying (claims-made or occurrence-based, as we discussed earlier).
- Read your policy thoroughly to wholly understand the ins and out before signing.
- Ensure the insurer is a licensed broker. You don’t need to worry when you work with us — we only connect our customers to the very best licensed brokerages and agents in Ontario.