Medical Malpractice Insurance
Medical Malpractice Insurance
There are many types of professional liability insurance needs but none may be as important as the need of doctors, dentists, nurses and other health care providers as the need for Medical Malpractice insurance.
A single error can wipe out the career and livelihood of someone who has been accused of failure to act in a competent manner thereby causing injury or even death to the person or persons in their care. Even if the alleged cause of action is groundless a defense still has to be launched to save those physicians or healthcare provider’s reputation, career and livelihood. The Medical Malpractice Liability insurance policy will cover expenses such as defense fees for the insured’s attorney as well as court costs and of course, payment up to the policy limit for any agreed settlements or court judgments against the insured.
One condition peculiar to the medical malpractice insurance policy is the insured’s written consent to settle a claim brought against them. Unlike most liability insurance policies where the insurance company reserves the right to settle a claim as they see fit the Medical Malpractice insurance company will never settle a claim without this written consent. This is because a settlement will most likely have an adverse effect on the insured’s reputation as well as the future costs of their Medical Malpractice insurance.
Another important condition of the Medical Malpractice insurance policy is the Hammer Clause and this is how it works. The most common Hammer Clause is known as an 80/20. Let’s say a claim is brought against the insured. The insurance company having experience in settling claims of this nature feels they can settle the claim for $300,000 and walk away. The plaintiff is willing to accept this settlement. But remember the policy terms state the insurance company can only settle a claim with the written consent of the insured. The insured, worried for his reputation and feeling the claim against him is without merit, does not want to settle and wants a jury trial which is his right as the policy holder. If the judgment goes higher than the $300,000 the insurance company could have settled for then the insured will pay 20% of the higher amount and the insurance company will only be responsible to pay 80% of the higher judgment. This does not pertain to only the judgment but to all additional costs incurred including the additional defense costs. Be careful as some policies have a Hammer Clause that can be 50/50. Always be sure what your Hammer Clause is and ask for it to be “softened”. If it is 50/50 ask for 70/30 or 80/20. Most insurance companies will work with you because there are high premium dollars involved in this type of liability insurance and fierce competition for your business.
The premium you will pay is based on the limits of coverage you purchase, your specialty and your years of experience.
Do not go it alone when you purchase this coverage. We do not recommend that any person needing this type of insurance buy it on line. You need a professional who understands the many caveats involved in this policy form. Let the experts at EZ Center Insurance Services be your trusted advisor for this ever so important decision.