Healthcare Facilities
Malpractice lawsuits can be filed against many types of professionals. As a business owner, you should consider this type of professional liability insurance to protect against claims of negligence, malpractice or misrepresentation.
Who Needs Malpractice Insurance?
Have you considered what types of insurance you need beyond a business owners policy? In most cases, the coverage you need depends on the type of work you do. Are you a mechanic? If yes, you’ll need shop liability insurance. Do you own a bar? Consider buying liquor liability insurance. For those in the medical or legal profession, you’ll likely want to be covered by malpractice insurance.
Malpractice insurance falls under the larger umbrella of specialty coverage called professional liability insurance. Business owners buy professional liability insurance because their general liability insurance doesn’t cover claims for malpractice, negligence or misrepresentation.
Malpractice insurance is a good idea for professionals and is required by law in many states for attorneys and healthcare providers.
Beyond medical
Medical professionals — a group that includes doctors and surgeons, home health workers, long-term care workers and facilities, hospitals and chiropractors — face many obstacles and pitfalls today, malpractice among them. In fact, a recent survey by the Institute for Healthcare Improvement (IHI)/National Patient Safety Foundation (NPSF) found that 21% of adults said they experienced a medical error — one that had a lasting effect on their emotional and physical health and financial well-being.
There are four common areas where medical malpractice lawsuits are filed:
- Issues arising from cosmetic surgeries
- Severe reactions or death from errors in prescribing drugs
- Injuries sustained from birth
- Diagnosis or surgical errors
- Privacy breaches
While most people associate the word “malpractice” with the medical professions, malpractice suits can be filed against many types of professionals. Attorneys and other legal professionals can face malpractice claims if they are accused of not completing their duties at the level of expected expertise. This ranges from overbilling clients to failing to represent a client properly in court, to improperly presenting the facts in a case or having a conflict of interest. There have even been cases of cybersecurity malpractice suits. In one, a Chicago law firm was accused of shoddy cyber security that allegedly resulted in a number of data security lapses that exposed client information.
Other white-collar professionals can face malpractice claims as well. Financial professionals who are accused of not executing trades or transactions as directed, charging excessive fees or even making improper financial recommendations can face malpractice suits. Stockbrokers who make misleading statements or conduct insider trading are committing malpractice. For accounting professionals, breach of contract or negligence, as well as misrepresentation to conceal wrongdoing, all fall under malpractice.
Architects, engineers and other skilled design professionals are subject to malpractice suits. Faulty design and engineering work associated with a construction project compromises the stability of a building and can jeopardize the well-being of workers, owners or inhabitants during and after the construction is finished.
Counselors, psychotherapists and massage therapists are also prime targets for malpractice suits. Like medical professionals, their work takes place in a private setting, which opens them up to claims of negligence or misconduct that can result in a malpractice suit.
A growing market
With so many opportunities for error and the growing size and number of claims, it’s no wonder the malpractice insurance market is skyrocketing. The medical malpractice insurance market alone sat at $17.1 billion in 2017; it’s expected to reach $19.7 billion by 2025, according to Orbis Research.
Because malpractice lawsuits can cost anywhere from several thousand to millions of dollars to defend, many professionals also purchase a supplemental policy that covers anything above standard malpractice coverage.
It’s wise to explore your level of malpractice liability and protect yourself and your business from potential malpractice suits. Your insurance professional will not only help you figure out if you are required to carry malpractice coverage, but also how much coverage you might need. Even if it’s not legally required, it’s better to be prepared. Misunderstandings and unfortunate mistakes can occur among even the most seasoned professionals, and litigation is common.