Your Guide to Malpractice Insurance

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.

Want to learn more?

Click here to download our full Malpractice Insurance Survival Kit

What is malpractice insurance?

Malpractice insurance helps protect you if someone files a lawsuit against you. Lawsuits are a reality of practicing chiropractic, but with the right policy, you can manage risk while providing the best care.

In most states, the law requires that chiropractors carry malpractice insurance. During chiropractic school, you were likely insured through your university. After you graduate, you’ll need to get your own 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. When you’re purchasing insurance through an agent or broker, they may offer you a set of quotes from various carriers that you can choose from. So, while agents can facilitate your policy purchase, carriers provide the actual coverage.

How you buy malpractice insurance varies depending on your situation. For example, a chiropractor with their own practice will purchase insurance differently than an associate employed by a group practice.

Ready to buy a policy? Schedule a free consultation with our team to see what options are best for you.

The cost of malpractice insurance varies greatly by your profession, how long you’ve been practicing, 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 guide to help you understand how pricing works at MedPro Group – the underwriting carrier behind ChiroPreferred:

  • Your factors
    Certain procedures carry higher risk, so those practitioners often have higher premiums.
    + Years in practice
    The longer you’re in practice, the higher your malpractice risk because of all the patients who could file a claim.

    + Coverage
    Occurrence and Claims-made have different pricing structures.

    + Location
    Some states and counties experience more malpractice claims than others, driving up coverage costs.
  • Our factors
    The majority of our expenses are for protecting you. Almost 3/4 of every dollar we spend goes toward claims payment and defense.

    + Operating cost
    We try to keep our operating expenses low, but we need premiums to be sufficient to allow us to pay our bills and employee salaries.

    + Market trends
    If there are a lot of claims and lawsuits across the industry, prices go up.
  • Your coverage cost
    What you pay for a policy premium is a result of all these factors.

There are two main types of malpractice policies:

continues to protect you, even after you stop practicing.  

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, which protects after you stop practicing. Read our article on the differences between Claims-made and Occurrence coverage here.

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 / $3M
    The total amount your insurer will pay for each claim filed against you.
    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. To decide what limits are right for you, you should talk to your agent or insurance carrier.
  • Consent provision (aka consent to settle)
    What is it:
    When you have a claim against you, there are two options: go to trial or settle (pay the demand). The consent provision says who has the power to decide to settle.

    How you should evaluate it:
    Make sure that the consent provision gives you the power to refuse settlement, not your insurer or a committee/board organized by your insurer. 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 policy.

    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 if the practitioner dies or is disabled, 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.

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?
    How to evaluate it:
    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?
    How to evaluate it:
    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.
  • Do they provide risk management resources?
    How to evaluate it:
    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.

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 lets me control the power 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?

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Want to learn more?

Click here to download our full Malpractice Insurance Survival Kit