The Cost of Malpractice Insurance: What Influences Premiums and How to Save
Your medical malpractice insurance premium is primarily determined by the statistical risk of a healthcare provider practicing in the same specialty and geographic area facing a medical negligence claim, as well as the expected cost of defending such a claim.
Factors That Influence Malpractice Insurance Premiums
Specialties like obstetrics and orthopedic surgery are considered high-risk and pay significantly higher malpractice insurance premiums. These fields experience a much higher frequency of medical malpractice claims, and the associated jury awards tend to be substantially larger. Estimates suggest that between 60% and 75% of ob-gyns will face at least one medical malpractice claims during their career, well more than twice the rate of general practitioners.
And unlike general practitioners, who primarily manage chronic conditions with a low risk of catastrophic outcomes, obstetricians handle high-stakes cases involving birth injuries such as cerebral palsy and hypoxic-ischemic encephalopathy. These conditions often necessitate lifetime care plans and compensation for decades of lost earnings, resulting in multi-million-dollar payouts in malpractice cases.
Because some states have more plaintiff-friendly legal environments than others, where you practice impacts the malpractice insurance premiums you pay. States that impose caps on recoverable noneconomic damages (e.g., pain and suffering), limit attorney fees and implement other reforms to discourage excessive litigation tend to have lower malpractice insurance premiums. Additionally, urban areas, with their larger populations and higher patient volumes, typically experience a greater number of claims and higher malpractice insurance costs.
Cost-Saving Tips for Doctors Looking for Affordable Malpractice Coverage
But there are ways to ensure you’re getting the most affordable malpractice coverage possible without changing your specialty or where you practice. Cunningham Group recently asked its sales manager David Leander for his cost-saving tips for doctors shopping for medical malpractice insurance.
Explore Available Discounts and Credits
Cunningham Group: What steps do you recommend doctors take to ensure they receive the most affordable malpractice coverage possible?
David Leander: Physicians and surgeons have several options to lower their malpractice insurance premiums. The simplest approach is to contact their current insurance provider. Many insurers offer credits that can be applied toward reducing premiums. These credits are often earned by completing a risk management course or attending a live seminar.
Many insurance companies also offer practice assessments, where their representatives visit your office to review your day-to-day processes and identify areas for improving your risk profile. Successfully passing the assessment or implementing the recommended improvements can make your practice eligible for additional discounts. This could save you between 3% and 6% on your premium.
Shop for Affordable Malpractice Coverage with an Independent Agent
Cunningham Group: Do you recommend shopping your coverage among the different insurance companies to find the most affordable malpractice coverage?
David Leander: I absolutely recommend working with an independent insurance agent who specializes in medical malpractice insurance, has access to a range of insurance company options and — after shopping your coverage — can put together a market analysis so that you can compare those options against your current coverage. Are there savings with another company? Is it enough savings for you to make that move?
Work with a Specialist in Medical Malpractice Insurance
Cunningham Group: How critical is working with an independent agent?
David Leander: There are nearly as many types of insurance agents as there are lines of insurance. Some agencies offer a wide range of coverages, while others focus on just one or two. When dealing with a highly specialized product like medical malpractice insurance, I recommend working with an agent who focuses exclusively on this area. You want someone who not only understands the marketplace but also has access to multiple malpractice insurance providers.
When choosing a medical malpractice insurance agent, ask how long they have specialized in this field. How many medical malpractice insurance companies does their agency work with? How many healthcare clients do they represent?
Additional Ways to Reduce Malpractice Insurance Premiums
Cunningham Group: Do you have any more cost-saving tips for doctors looking to reduce the price of their medical malpractice insurance premiums?
David Leander: If a physician or surgeon wants to further reduce their medical malpractice insurance premiums, they should assess their practice to identify any high-risk procedures they perform infrequently and are willing to eliminate. Removing such procedures can often lead to a premium reduction.
Additionally, physicians can lower their premiums by reducing their weekly practice hours. Those working between 22 and 25 hours per week should consider reducing their hours to below 20 to qualify for a part-time discount, which can be substantial. Most insurance companies offer discounts of up to 50% for physicians working 20 hours or less per week.
Save on Malpractice Insurance with the Right Approach
Understanding what influences malpractice insurance premiums and knowing how to secure affordable malpractice coverage can make a significant difference in long-term costs for physicians and surgeons. High-risk specialties and location play major roles in determining rates, but there are ways to reduce premiums without compromising coverage.
Doctors can take advantage of discounts, work with an independent medical malpractice insurance agent, and modify their practice structure to optimize their policy pricing. By following these cost-saving tips for doctors, healthcare professionals can secure high-quality coverage while keeping expenses under control.
At Cunningham Group Insurance, we help physicians compare rates from multiple malpractice insurance providers to find the best coverage at the lowest price. Contact us today for a free quote and see how much you can save.
