5 Things You Should Know About Medical Malpractice Insurance

Insurance Blog

The nature of your work as a physician exposes you to medical malpractice claims by your patients. It doesn't matter how good you are at your job. A patient might accuse you of surgery, anesthesia, and medication errors. Others may want to fix you for negligence during childbirth, negligent prenatal care, or missed or delayed diagnoses. 

The American Medical Association reports that at least 61 percent of doctors above 55 years old have had their patients sue them for malpractice at least once. To avoid assuming liability, you need to take out a medical malpractice insurance policy. Here are some standard terms to learn:

Admitted Carrier

This is an insurance company with the requisite state licensing and regulation, assuring you protection by the state's guarantee fund. So, it is essential to ask your medical malpractice insurance agency if they represent an admitted carrier. If you insure with any other company, you might not get compensation when it declares bankruptcy.

Annual Aggregate Limit

An insurance company can only pay up to a certain maximum amount in a year. The limit is called the annual aggregate limit and includes all the claims made by patients against you. If multiple patients sue you for claims, then the yearly aggregate limit may fail to pay all of them.

Consent to Settle Clause

That's a clause in medical malpractice insurance, which states that the insurance company cannot settle a claim if you decline to issue a written consent. The clause protects you from the insurance company settling unmerited claims out of the fear of putting up a complete defense. As a doctor, that might give the wrong impression of guilt.

Hammer Clause

The opposite of the consent to settle clause, the hammer clause allows the insurance company to settle unmerited claims without consulting you. However, you may still refuse to pay. In that case, you will be responsible for all costs above the settlement amount. That negates the whole purpose of insurance, which is relieving you from financial liability.

Non-Admitted Carrier

When an insurance company is non-admitted, it doesn't operate under the license and regulation of the state department of insurance. Insuring such a company removes any protection you could have enjoyed from the state's guarantee fund when the company declares bankruptcy. Again, it would help if you did due diligence before taking out a policy to avoid such a case.


All physicians need medical malpractice insurance to protect them from liability resulting from negligence claims by their patients. You need to know the meaning of admitted carrier, consent to settle, hammer clause, annual aggregate limit, and non-admitted carrier to avoid mistakes. Talk to your medical malpractice insurance agency today for a policy.


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