Medical Professional Liability Insurance or sometimes called medical malpractice insurance is a professional liability insurance which protects physicians and other hospital authorities against malpractice lawsuits. With an increase in Medical Practice Marketing, there is a requirement for an insurance to safeguard has become a necessity.

Occurrence Policy:
Occurrence coverage is preferred of the two because the policy is over when you purchase it. However, on cancellation, the policy covers coverage for future claims depending on the credibility of the hospital/doctor. The limit payable is the limit set at the time of purchase of the policy. However, it must be noted that this is not available in all states. The premium for this product is standard and does not change.

Claims-made:
Claims-made policy is a policy where the premium must be paid for the initial policy and subsequent renewals. If the company pays a premium for 5 years and stops paying after that then the policy ceases for the cases, the hospital/doctor didn’t accept during the tenure of the policy. To lock it in there is an Extended Reporting Endorsement which is sometimes referred to as the tail. Tail premiums are generally 100% to 500% of the mature premiums and these premiums are a one-time payment lump sum at the cancellation of the policy.

However, one can move from one insurance company to another without purchasing the tail. If one wants to change, the new insurer takes over the premium by writing over the previous insurer from a past date. Many insurance companies give free-tail to the insured if the insured dies or is completely disable or has retired from the professions. The free tail is offered after 5 years of paying premiums.

The costs of medical malpractice tend to vary from state to state. In some states, the range is from $4000 to $17000 whereas in some it is $22000 to $34000. The cost will also depend on coverage of your policy. In order to pay heavily later, medical professionals/hospitals have medical malpractice insurance as a safety net from lawsuits.