Your Guide to
Malpractice Insurance
How to choose a policy that’s right for you.
As a chiropractor, your job carries risk. Whether you’re joining a group or starting your own practice, you’ll need to purchase malpractice insurance to protect your career. We’ve put together this guide to help you understand the different coverage types and introduce you to some common terms. Learn the basics of malpractice insurance so that you can choose the right policy for your situation.
What is malpractice insurance?
Malpractice insurance helps protect you if someone files a claim or lawsuit against you. Lawsuits are a reality of practicing, but with the right policy and carrier, you can manage risk while providing the best care.
Who needs malpractice insurance?
In most states, the law requires that chiropractic professionals carry malpractice insurance. During school, you were likely insured through your college. After you graduate, you’ll need to get your own malpractice insurance.
How do you buy malpractice insurance?
An insurance carrier issues your policy and is responsible for providing your coverage. You can buy your policy through an agent or broker, or directly from a carrier. While agents can facilitate your policy purchase, carriers provide the actual coverage.
Ready to buy a policy? Schedule a free consultation with our team to see what options are best for you.
How much does malpractice insurance cost?
The cost of malpractice insurance varies greatly by your profession, where your practice is located, and what type of coverage you have. Year-over-year, malpractice prices may also change based on claims and industry trends.
This creates a lot of pricing variation across carriers and often leaves practitioners feeling confused. While we can’t speak for other insurance companies, we’ve put together this graphic to help you understand how pricing works at MedPro Group — the underwriting carrier behind ChiroPreferred:
Your factors
Profession
For example, certain specialties carry a higher risk and may have higher premiums.
+ Coverage
Occurrence and Claims-made policies have different pricing structures.
+ Location
Some states and counties experience higher malpractice claims than others, driving up coverage costs.
+ Others
Other factors, like how many hours you practice or your claims history, can also affect your cost.
Our factors
+ Market trends
Based on claim and lawsuit trends across the industry, prices can change.
+ Claims
The majority of our expenses goes toward protecting you through claims management and defense.
+ Operating cost
We try to keep our operating expenses low, while ensuring we can pay our bills and employee salaries.
+ Stability
As a Berkshire Hathaway company committed to being around for the long haul, our rates are built to be stable and sustainable.
The cost of your premium
is the result of all these factors.
What are the types of malpractice policies?
There are two main types of malpractice policies:
Occurrence
You’re covered by your policy from when the treatment occurred. See how it works.
Occurrence
continues to protect you, even after you stop practicing. That also means prior coverage is in place even if you change practice locations or get new employment.
Claims-made
You’re covered by your policy from when the claim is made. See how it works.
Claims-made
only protects you the year you have the policy, similar to health insurance.
Since Claims-made coverage only protects you during the policy period, most people with this kind of policy also purchase tail coverage when the policy is canceled, which protects after you stop practicing.
How should you choose a policy?
You now know the difference between Occurrence and Claims-made, but there are other important aspects of coverage you should consider before signing a contract.
Policy limits
What they are: The policy limits are the maximum amount your insurance carrier will pay for claims filed against you. Policy limits are written as two, side-by-side numbers:
$1M
The total amount your insurer will pay for each claim filed against you in one policy period.
$3M
The total amount your insurer will pay if you get multiple claims filed against you in one policy period.
How you should evaluate them: Make sure your policy limits are high enough to protect you throughout your whole career. If you treat a lot of patients, for example, you may want higher limits. To decide what limits are right for you, you should talk to your agent or insurance carrier.
Consent provision
What is it: If a claim is filed against you, the consent provision in your malpractice policy determines if your insurance carrier has the power to decide to settle your case.
How you should evaluate it: Make sure that the consent provision gives you the ability to refuse to settle, and doesn’t have hidden exceptions that take away your say in the decision. If others can decide when to settle a case, they may do so even if it’s against your best interest.
Tail Coverage
What is it: If you choose a Claims-made policy, you should be aware that you’ll need to get tail coverage after you stop practicing, which extends your protection.
How you should evaluate it: Tail coverage can be very expensive, and many insurers claim to offer free tail coverage. But read the fine print! Some insurers only provide free tail coverage upon death or disability, or there may be age restrictions on when you can retire.
Additional coverage
What is it: As an added benefit, insurers often include additional coverage as part of your policy. This may include cyber liability, HIPAA coverage, audit coverage, billing errors coverage, administrative hearing coverage, and more.
How you should evaluate it: You should look closely at these additional coverages to make sure your practice is appropriately protected. If you’re unsure, you may want to talk to your agent or carrier about custom solutions.
How should you choose a carrier?
An important part of buying malpractice insurance is choosing a carrier you can trust. Here are three big differences between carriers that you should consider.
Are they experienced in claims defense?
Your carrier should have a record of strong malpractice litigation. You should look at their trial win rate, the number of claims they’ve managed since their founding, and how many claims they’ve closed without payment. All of these numbers should be high.
What is their financial strength?
Your insurance carrier should have the financial resources to protect you in the worst-case scenario. You can check a carrier’s financial strength rating through independent agencies like A.M. Best.
Do they provide risk management resources?
Your insurance carrier shouldn’t just help you defend claims; they should help you avoid them. Make sure your carrier offers materials and advice for reducing risk, which will help you make your practice safer.
What should you ask when choosing a policy?
So far, you’ve learned the basics about malpractice insurance, with guidance on how to evaluate a policy and understand the differences between coverage. Here’s what you should ask yourself before signing off on a policy:
- What type of coverage do I want: Occurrence or Claims-made?
- What amount of policy limits do I need?
- If I choose a Claims-made policy, will I have to buy tail coverage? And how much will it cost?
- If my tail coverage is included in a Claims-made policy, what are the conditions that I need to meet to qualify for free tail coverage?
- Is there a consent provision that allows me to refuse to settle?
- Does the insurer have experience with claims defense? What is their trial win rate? How many claims do they close without payment?
- What other coverage does this policy include (or not include), i.e. cyber liability, billing errors, administrative hearings, etc?