By Maria Palma
Medical malpractice is a negligence by a medical professional that causes injury or death to a patient. A lawsuit involving malpractice can be quite costly, thus inviting the need for health care providers to protect themselves from liability.
In recent years there has been a great deal of discussion regarding the rising cost of medical malpractice insurance rates and the effect it has on the healthcare economy.
How Does Medical Malpractice Insurance Work?
Medical malpractice insurance protects a professional working in the medical industry from loss due to a lawsuit. However, keep in mind that this type of insurance is not the same as auto insurance. When you purchase auto insurance, the provider usually looks at your driving experience before approving your application for insurance.
If you have a claim, usually your premiums increase. However, malpractice insurance does not work like that. Experiments with an individual physician's experience rating have not worked because physicians' claims experience fluctuates over short time periods, which makes it difficult to produce a stable estimate of their risk.
How Are Rates Calculated?
Insurance rates are usually set and approved by the state insurance commissioner in each state. From there, other factors come into play such as a physician's specialty and geographic location.
As stated earlier, rates have increased which has caused concern among the medical community. Some analysts have speculated that there are a number of reasons why rates have risen including:
* The repeating cycle that the insurance industry experiences.
* There are fewer insurers on the market and less competition on premiums.
* Lack of income from the investment of insurance providers' reserves.
* Growth in the size of payouts to patients.
Is Medical Malpractice Insurance Necessary?
Nearly all states require insurance. Anyone working in a medical profession can purchase insurance from an independent provider or a physician-owned mutual company, either individually or through a group practice.
Maria Palma is a freelance writer and internet marketer dedicated to helping businesses like Nexus Insurance Services grow their business online. Contact Nexus Insurance for a malpractice insurance quote.
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FAQ's of Medical Malpractice InsuranceBy Maria Palma
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