What does the policy cover?
In the event of a lawsuit, you face a possible loss of business, time away from patients, a potentially damaged reputation in the community, not to mention the personal anguish experienced by you, your family and your office staff. To ensure you're properly protected, it's critical that you understand a policy's indemnity, legal defense and supplemental coverages.
One of the main purposes of malpractice coverage is to pay damages suffered by the plaintiff (patient). The amount of money paid to the plaintiff as the result of a settlement or award is called an indemnity payment.
Payments for indemnity are available up to the limits of liability of your policy. (See limits of liability in the next section.)
Your malpractice insurance company is responsible for providing you with a defense and paying for it. This is a significant part of your coverage because defending a chiropractic malpractice claim can easily cost tens, even hundreds, of thousands of dollars. Even if you've done nothing wrong, the cost to defend a claim can be significant.
It's important to understand how your malpractice company will pay for your legal fees. Some companies limit their defense expenses by paying your legal fees within the limits of liability of your policy.
What About Arbitration Agreements?
One practice insurance companies employ is to have doctors enter into arbitration agreements with their patients. This requires you to ask your patients to sign a form mandating that they submit to arbitration should they decide to pursue an allegation of malpractice.
Arbitration is less expensive for the insurance company because the doctor gives up the option to go to court. The doctor may more likely be found at least partially at fault because the arbitration process typically favors compromise. Further, some states do not uphold arbitration agreements for insurance policies because they bar the constitutional right to a jury trial.
Under this provision, any claim by the patient is presented to an arbitrator for review, and both you and the patient forfeit the right to pursue litigation. Arbitration is binding, so there is no appeals process.