Understanding the Increase in Medical Professional Liability Insurance Premiums
Written by Stephen Lim Lic#0M66738
As a healthcare provider, having medical professional liability insurance is essential to protect you from potential litigation. The coverage provides financial assistance in case of malpractice claims or lawsuits. However, as you continue to renew your policy, you may notice an increase in your insurance premiums. In this blog post, we will discuss the reasons behind the increasing premiums and how healthcare providers can manage the cost.
1. Explaining the Increase in Medical Professional Liability Premiums:
As your insurance policy matures, the likelihood of claims and lawsuits increases, which leads to an increase in premiums. Medical professional liability insurance is a claims-made policy, which means that the policyholder is only covered for claims that are made and reported during the policy period. Therefore, as the policy gets older, there is a higher chance of claims occurring that would be covered in a new policy. Insurance companies factor in the age of the policy and the claims history when deciding on premium rates.
2. Understanding the Risk Factors:
Medical professional liability insurance premiums are based on multiple risk factors, including specialty, location, claim history, and average settlement amounts in the area. Healthcare providers in high-risk specialties, such as neurosurgery or obstetrics, are likely to pay higher premiums due to the increased risk of malpractice claims. The location of the practice also plays a role, with higher premiums being charged in areas with a higher cost of living or a higher frequency of claims.
3. Managing the Cost of Medical Professional Liability Insurance:
Healthcare providers should take steps to manage their insurance costs and avoid potential premium increases. One option is to reduce risk by implementing risk management strategies in practice, such as improving communication with patients, conducting regular audits, and developing safety protocols. Additionally, providers can consider increasing their deductibles, implementing group policies, or shopping around for alternative insurance providers to find a better rate.
4. The Importance of Maintaining Coverage:
Despite the increasing premiums, it is essential for healthcare providers to maintain medical professional liability coverage. Going without insurance could lead to severe financial consequences in the event of a claim or lawsuit. Even a baseless claim could cost thousands of dollars in legal fees and penalties. Maintaining coverage can provide peace of mind and protect the financial stability of the practice.
5. The Impact of COVID-19 on Medical Professional Liability Insurance:
The COVID-19 pandemic has led to significant changes in the healthcare industry, including an increase in telehealth services. Medical professional liability policies have evolved to accommodate these changes, with many providers now offering coverage for telehealth services. However, the increased risk of exposure to COVID-19 and potential malpractice claims has led to some insurance companies increasing their premiums for coverage, particularly for providers offering COVID-19 testing or treatment.
Medical professional liability insurance is essential for healthcare providers and protects them from potential litigation. While the premiums may increase over time, there are ways to manage these costs through risk management strategies, adjusting deductibles or exploring alternative insurance options. Regardless of the cost, maintaining coverage is essential for protecting the financial stability of a healthcare practice. As the healthcare industry evolves, providers should regularly review their policies to ensure they are covered for any emerging risks and maintain their peace of mind.
