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How much does medical malpractice insurance cost?
The cost of medical malpractice insurance depends on the type of work you do, how many employees you have, your claims history, and other business factors. Outside the field of healthcare, this policy is known as professional liability insurance.
What is the average cost of medical malpractice insurance?
The cost of medical malpractice insurance varies widely depending on your profession, your state, and other factors.
A non-medical home health aide might pay as little as $10 per month for malpractice insurance, while surgeons can expect to pay several thousand dollars every month for this coverage. Dietitians and nutritionists pay about $30 per month.
Malpractice insurance is crucial for every type of healthcare professional. It's often required by healthcare networks, state laws, and healthcare facilities. If you're sued for professional negligence, such as a misdiagnosis or other error, this policy helps pay for attorney's fees, court-ordered judgments, and other legal costs.
Typical malpractice insurance costs by specialty
Here are some average costs from the American Medical Association (AMA) for physicians in three specialties who bought $1 million/$3 million malpractice policies in 2022. Keep in mind that physicians are among those who pay the most for this type of insurance.
Medical malpractice insurance rates by state
| State (County) | Internal medicine | General surgery | Obstetrics/Gynecology |
|---|---|---|---|
California (Los Angeles, Orange) | $690 per month | $3,481 per month | $4,150 per month |
Connecticut | $1,700 per month | $8,155 per month | $12,070 per month |
Florida (Miami-Dade) | $4,666 per month | $18,852 per month | $18,852 per month |
Illinois (Cook, Madison, St. Clair) | $3,982 per month | $11,651 per month | $17,402 per month |
New Jersey | $1,325 per month | $5,068 per month | $7,562 per month |
New York (Nassau, Suffolk) | $2,580 per month | $11,741 per month | $13,303 per month |
Pennsylvania (Philadelphia) | $2,659 per month | $8,751 per month | $15,547 per month |
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Understanding malpractice insurance cost factors
Insurance companies will look at several factors when calculating your premium, such as:
- Policy limits
- Business location
- Specialty
- Claims history
If you need help deciding which policy limits or other coverage options are right for your business, consult a licensed agent.
How do policy limits affect the cost of malpractice insurance?
Medical malpractice insurance covers medical liability claims up to your policy limits. A policy with lower limits cost less, but it might not provide sufficient protection in the event of a lawsuit. These limits vary significantly, from $250,000 to $3 million.
You may see these limits of liability on a malpractice policy:
- Per-occurrence limit. While the policy is active, the insurer will pay up to this amount to cover a single incident.
- Aggregate limit. During the lifetime of the policy, this is the maximum the insurer will pay to cover claims.
- Per-claim limit. This is the most the insurer will pay for a single claim while the policy is active.
Typically, state laws or the terms of a contract will determine how much malpractice insurance coverage you need. In any case, make sure your limits can cover a potential lawsuit so you don't end up paying for legal costs out of pocket.
How does your location impact the cost of malpractice insurance?
State regulations have a big impact on malpractice insurance premiums. Some states have tort reform laws that limit the damages awarded from malpractice lawsuits, which can help bring down costs.
Overall, you can expect lower premiums in the same states where you find lower rates for wages, living expenses, and healthcare.
The three states with the highest rates are:
- Florida: $1,247 to $3,976 per month
- Illinois: $1,193 to $3,473 per month
- Connecticut: $1,299 to $2,892 per month
Physicians are generally the only medical professionals who are required to carry malpractice insurance by law. However, state laws typically mandate workers' compensation insurance for businesses that have employees, and commercial auto insurance for business-owned vehicles.
How does your specialty affect your medical malpractice premium?
For small businesses, your industry can have a tremendous impact on your premium. Insurance providers will look at businesses that are similar to yours to determine how much they should charge you.
Medical professionals with higher risks, like doctors and surgeons, can expect to pay the most for malpractice coverage. On the other hand, physical therapists and nurses can expect lower rates. It all depends on how much a liability claim might cost the insurer in court.
A patient is more likely to seek hundreds of thousands of dollars in damages from a surgical mistake than an error made by a physical therapist, which is why surgeons pay such a high rate.
Within your specialty, factors such as whether you offer telemedicine will also affect your rate.
How does your claims history affect your malpractice premium?
As with other types of business insurance, a claim on your policy will cause your premium to increase. A business that makes a claim is considered likely to do so again in the future, which makes you more risky to insure.
Fortunately, a strong risk management plan can help you avoid incidents that lead to medical malpractice claims. For example, nurses can reduce their chance of a claim by documenting every aspect of patient care, keeping doctors well informed, and following established procedures for medication administration and other tasks.
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Medical malpractice insurance provides necessary protection for healthcare professionals
When you work in healthcare, malpractice insurance is a must-have. You may see it referred to as professional liability insurance, errors and omissions insurance (E&O), or professional indemnity insurance depending on the industry.
Even the most experienced medical professionals can make a mistake when they're tired, or give advice that inadvertently harms a patient. If a patient or family member sues, the cost of a lawsuit could sink your business.
This policy can also cover accusations of sexual misconduct and expenses associated with Health Insurance Portability and Accountability Act (HIPAA) proceedings.
As an example, a patient could have an allergic reaction to a medication you prescribed, or a distraught family member could claim that you failed to meet the standard of care. Even if you've done nothing wrong, you still have to pay for attorney's fees and other legal defense costs.
A malpractice insurance policy helps pay for costly legal bills in a crisis, which could save your business from bankruptcy. Because the premium is based upon your level of risk, policyholders in some professions pay only a small monthly premium for their coverage.
How can you get affordable malpractice insurance?
Though malpractice insurance is expensive for some healthcare providers, it's always possible to reduce your premium. Beyond choosing lower limits and keeping your claims history clean, there are several additional steps you can take:
- Shop around. Insurance carriers often sell similar policies at different rates. To find a good price, compare medical malpractice insurance rates from trusted carriers with Insureon's easy online application.
- Pay the annual premium. You can choose to pay your premium once a month or once a year. Insurers offer a discount when you pay the full annual amount instead of monthly payments.
- Work with an agent. An agent can help you find coverage that fits your risks and your budget, without any extras you don't need. They can also navigate the insurance market to find cost-saving bundles for your business.
- Keep continuous coverage. Stopping and starting coverage is a red flag for insurers, and may end up costing more in the long run. Keep in mind that malpractice insurance is typically a claims-made policy. That means in order to collect on a claim, your policy must be active both at the time of the incident and when the claim is filed.
- Choose a higher deductible. Policies with higher deductibles have lower premiums, but make sure it’s an amount you can easily afford. The deductible must be paid in full before you can collect on a claim.
Why do small business owners choose Insureon?
Insureon is the #1 independent agency for online delivery of small business insurance. We partner with the nation's leading insurance carriers to help business owners find insurance coverage that matches their risks and their budget.
To get started, contact our dedicated medical malpractice insurance agent at (312) 854-2919 or [email protected]. You’ll typically be able to get coverage quickly and receive a copy of your insurance certificate on the same day.
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Learn more about business insurance costs
Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific type of policy.
Updated: October 2, 2024