5 Common Mistakes That Increase Medical Malpractice Insurance Cost

We here at Cunningham Group understand that medical professionals don’t want to pay any more than necessary for great medical malpractice insurance coverage. We know that managing your medical malpractice insurance costs is important for your practice.

Fortunately, we’ve helped countless clients find better coverage and avoid costly pitfalls. So, let’s take a moment to share some valuable insights – straight from others’ mistakes.

Why Medical Malpractice Insurance Costs Matter

Medical malpractice insurance cost is what doctors and other healthcare professionals pay to protect themselves from claims of negligence or mistakes. Since many factors influence this cost, understanding them helps you make informed choices, manage your budget effectively, and obtain the right coverage without paying more than necessary.

Key Factors Influencing Your Medical Malpractice Insurance Premiums

• Specialty: High-risk specialties like surgery or obstetrics typically face higher premiums, while lower-risk fields may pay less.
• Location: Geographic location matters – states with higher litigation rates often have higher insurance costs.
• Claims History: A record of past claims or disciplinary actions can increase your premiums.
• Practice Size: The number of physicians and staff in your practice can impact your rates.
• Coverage Limits: Higher coverage limits generally mean higher premiums.
• Risk Management Practices: Participation in risk management programs or courses can sometimes earn you discounts.
• Years of Experience: More experienced practitioners may be viewed as lower risk, depending on their record.
• Type of Policy: The choice between claims-made and occurrence policies can affect your premium.

Five Mistakes That Increase Medical Malpractice Insurance Cost

1. Leave a Gap in Coverage: Gaps in coverage are like red flags to insurers. Suppose you left a job but didn’t purchase a tail on your claims-made policy? Even if it was unintentional, insurers view it as a risky behavior. In fact, it can look as concerning to them as a claim or disciplinary issue! Insurers equate a gap with potential irresponsibility, and that usually translates to higher premiums. So, anytime you’re leaving a position, check if tail coverage is necessary and consider discussing with your agent how to cover any gaps.
2. Ignore Available Discounts: Think discounts are too much effort? No problem – insurers will happily take full price! But if you’re looking to pay less, it’s worth asking your agent about any discounts you might qualify for. Some agents will suggest these automatically, but not always. Things like no recent claims, group policies, and even clean driving records can sometimes mean savings. So if you’re looking to spend less, ask about those discounts!
3. Rack Up Recent Claims or Disciplinary Actions: It’s true – claims and disciplinary actions stick to your record like glue. Whether a claim was justified or not, it’s counted as a risk factor by insurers. Disciplinary actions? Even more so. Having either (or both!) can send your premiums sky-high. It’s always wise to keep a clean record wherever possible to avoid those pesky premium hikes.
4. Go Straight to One Insurance Company: Why get one quote when you could get five? Believe it or not, going straight to one insurer doesn’t save you any money. State regulations require insurance prices to be fixed, so working with an agency doesn’t incur additional costs. An agency, however, can provide malpractice insurance quotes from multiple companies all at once, giving you a choice and potentially saving you money by finding the best rate without jumping from company to company.
5. Stick with the Same Insurer Year After Year: We get it – loyalty is valuable, but with insurance, it’s also expensive! Rates change every year, so even if last year’s provider had the best rate, this year might be a different story. Checking around the market each year helps you avoid premium creep and makes sure you’re always getting the best price for your coverage. Spend a little time, save a lot of money.

Four Bonus Tips…

• Don’t Overlook Policy Details and Exclusions: Glancing over your policy details can end up costing you. If you miss key exclusions or misunderstand your coverage limits, you might find yourself needing extra coverage later – often at a higher price. Take the time to review your policy and ask your agent about anything that’s unclear. This way, you avoid paying for gaps or unnecessary extras.
• Be Sure to Update Practice Information: Forgetting to update your insurer when your practice changes – such as adding new services, expanding your team, or relocating – can result in higher premiums or even denied claims. Insurers rely on accurate, current information to calculate your medical malpractice insurance cost. Keep your agent informed to avoid unexpected costs or complications.
• Don’t Automatically Choose the Highest Coverage Limits: It’s easy to think more coverage is always better, but picking the highest limits without considering your actual needs can drive up your cost of medical malpractice insurance. Work with your agent to assess your risk and select coverage that truly fits your practice, so you’re not overpaying for protection you don’t need.
• Stay On Top of Updating Employee Information: Love overpaying? Great! One easy way to pay more is by failing to notify your insurer when an employee leaves or is terminated. Insurers base premiums on the number of covered individuals, so don’t let them charge you for someone who’s no longer on your team. A quick call to update your policy could save you a significant amount of money.

How to Proactively Lower Your Risk Profile

Lowering your risk profile isn’t just about avoiding claims – it’s also about showing insurers you’re committed to best practices. Here are a few simple ways to do that:

• Take Risk Management Courses: Taking risk management courses keeps you up to date on best practices and can even earn you discounts from many insurers. These programs help you spot and address risks early, making you a stronger candidate for lower medical malpractice insurance costs.
• Keep Thorough Documentation: Keeping accurate and detailed records is key if a claim ever comes up. Good documentation shows insurers you’re organized and careful, which can help lower your risk profile and reduce your insurance cost.
• Communicate Clearly with Patients: Clear communication with patients helps prevent misunderstandings and lowers the chance of complaints or claims. Taking time to explain procedures and answer questions builds trust and can make legal issues less likely.
• Follow Established Protocols: Using checklists and following established guidelines helps you avoid mistakes and shows you’re committed to quality care. Sticking to proven protocols protects your patients and reassures insurers that you’re focused on high standards.
• Review and Update Procedures Regularly: Reviewing and updating your procedures keeps your practice current with the latest standards. Making sure your team is trained on any changes helps create a safer environment and shows you’re proactive about risk management.
• Report Incidents Promptly: Reporting issues as soon as they happen can keep small problems from turning into big ones. Prompt reporting shows insurers you take risk seriously and are committed to resolving concerns quickly, which can help with your insurance cost.

What to Ask Your Insurance Agent Before Renewing

• Are there any new discounts I can get this year?
• Has anything changed in my risk profile?
• Are there better coverage options or lower rates with other insurance companies?
• Can we review my current policy to ensure it still meets my needs?
• Are there any changes in the market that could affect my premium?

All Kidding Aside, Are You Ready to Save Instead?

We know you’re committed to keeping your hard-earned dollars in your practice. But hey, sometimes higher medical malpractice insurance cost just happen! At Cunningham Group, we believe that paying only what you need for your malpractice insurance should be easy.

Contact us today to get free Medical Malpractice Insurance quotes, discuss coverage options, and find the best rates to protect your practice and your wallet.

*This article has been updated with new information