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.)

Legal Defense

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.

Clearly one of the biggest expenses for a malpractice insurer is providing a defense to the doctor.

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.

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.

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.

©2019, NCMIC Insurance Company, Clive, Iowa. The NCMIC family of companies provides professional liability insurance and financial services to health care professionals. All rights reserved. No part of this book may be reproduced in any form or by any means, including photocopying, or utilized by any information storage and retrieval system without written permission from the copyright owner. We Take Care of Our Own is a registered service mark of NCMIC Group, Inc. and NCMIC Risk Retention Group, Inc.