All doctors should carry malpractice insurance. You never know when an unfortunate accident might merit a claim. But malpractice insurance costs money, and you'll pay based on various risk factors. How do these risks, statistics and demographics impact your insurance costs? Is there any way to manage rates?
Your risks might drive your costs up or down. However, rest assured, your agent can take a close look at these factors to make sure you never pay too much.
What's an Insurance Risk?
In simple terms, an insurance risk is how likely you are to file a claim on your policy. Thus, if you have higher risk, that means your insurance company is more likely to have to pay on your behalf. Therefore, they're likely to increase your policy price as your risk level increases. That's to safeguard their investment in you as a customer.
Some malpractice risks you can control. Others are a little harder to manage. Yet, they all impact how much you'll pay for coverage. Give some of the following risk factors consideration when ready to buy.
Risk One: The Amount of Coverage You Buy
It's a simple idea. If you buy more, expect to pay more. Therefore, if you buy higher coverage limits for your policy, you will pay more in your premium. Five million dollars in coverage is worth more than $1 million, after all. Likewise, if you choose a higher deductible compared to a lower one, you might save on your coverage.
Your agent can help you analyze how much coverage to buy. Often, this will depend on various factors, including your value as a physician. Your facility might also require you to carry certain limits as well. If you have any minimum requirements, don't buy under these limits.
Risk Two: The Type of Policy You Select
All malpractice policies will vary. Therefore, if you buy a certain type of coverage, you might pay more than if you buy its counterpart. Usually, you have a choice between two general policies.
- Occurrence policies last a certain term of years. However, they continue to offer coverage after they expire. So, even if someone makes a claim five years after the policy expires, its limits can still apply.
- Claims-made policies last a certain term. However, to get coverage, both the incident and the claim must occur during the policy period. If you want coverage for a claim outside the term, you might need a tail policy to cover you retroactively.
Generally, you'll find occurrence policies more expensive. However, with these, you won't have to worry about getting extra protection like tail coverage. Therefore, look at the cumulative cost between the two.
Risk Three: Previous Claims History
If you have a previous claim on your policy, it will prove to your insurer that you are a higher risk to cover. Therefore, they're likely to increase your premium prices, at least temporarily. In certain cases, your premium will decrease if you go a certain period without a claim after filing one.
Risk Four: Your Specialty
Your particular focus of care will likely cause your policy costs to vary. For example, a neurosurgeon performs much more sensitive, expensive work than an internist. That's not to say one specialty is more important than the other. Yet, in this case, surgeons generally do have more value attached to their operating risks.
Risk Five: Location of the Practice
Most liability policies consider location risks when setting rates. Therefore, where you work might influence your policy costs. For example, a doctor in a large hospital will likely pay a different price than one in a private practice. Even geography might make a difference. Practicing in a city will involve different risks than practicing in a rural community. So, your premium might vary based on the risk pool of challenges and doctors in your local area.
Risk Six: Your Working Hours
Some doctors work long hours, and only see patients. Others only practice part-time, while they work as a lecturer in a medical school, for example. The point is, how long and how often you work will likely impact your malpractice insurance costs. Generally, if you work only around 20 hours per week, you’ll likely receive discounted rates.
Risk Seven: Staff Size
Some physicians carry insurance for both themselves and the staff of their practice. Think of it like a group health insurance policy. Adding someone to the policy will likely raise your costs. Removing someone, likewise, might decrease premiums.
Your goal is to keep your insurance roster 100 percent up-to-date. If someone leaves your practice, take them off your policy. If someone joins, add them to the policy before their first day with you. Do not make the mistake of waiting to add someone to your coverage. You want someone to have coverage as soon as they start work. If they don't, you run the risk of a mistake occurring when someone doesn't have coverage.
Various other factors might improve your premium costs. To learn more about malpractice insurance, contact the experts at Joseph A. Britton Agency.