How much coverage do I need?

Determining your level of coverage is an important part of your decision to protect your patients, practice and assets. You'll want to take into consideration the amount of money that may be needed by a patient who was inadvertently injured as a result of treatment, as well as sufficient coverage to protect your other patients, your practice and your financial future.

There are other factors, as well. Third-party payer contracts generally require you to carry malpractice insurance with certain limits of liability, so be sure to ask the provider relations department of any network in which you participate about their requirements. In addition, state statutes may require coverage minimums, and an employer may require similar policy limits for everyone in the office.

It's important to keep in mind that lower policy limits can affect the outcome of a case. Lawsuits are often a process of negotiation and compromise, and if your policy limits are inadequate to negotiate a settlement, they can become a barrier to reaching a successful outcome. Moreover, low policy limits can also expose your personal assets if a judgment exceeds policy limits. Then, you are liable to pay the excess.

As you can see, the issue can be complex, so it is wise to consult with your accountant, lawyer, or another business advisor to assist in determining how much coverage you need. Then, revisit your malpractice coverage annually to make sure you have adequate protection as your practice grows or changes.

Malpractice insurance policies offer a wide range of limits for both single claims and total claims per year, known as single claim limits and aggregate limits. In Figure 1, the inset section refers to the maximum amount your policy will pay for any one claim. The entire graph represents the maximum amount your policy will pay during each annual policy period.

figure 1

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