Each time a health care professional is sued for malpractice, there is a minimum average cost of more than $24,000 associated with establishing a defense alone, reports the U.S. Department of Health and Human Services. Mapractice insurance helps protect health care professionals from these costs.

Function

Medical practice insurance is a type of protection that covers the cost of legal fees or settlements and damages awarded as a part of a court case.

Types of Professionals

While most people think of malpractice insurance for doctors, other health care workers may purchase the coverage as well, including nurses, occupational and physical therapists, physician's assistants and pharmacists.

Cost

In exchange for the coverage provided by malpractice insurance, health care providers pay a premium or fee, which typically starts at around $35,000 per year and may cost hundreds of thousands, reports the U.S. Department of Health and Human Services. The cost of the coverage varies based on the provider's medical specialty, history of malpractice claims, years of experience and geographic area.

Requirements

Most states mandate that physicians have a minimum amount of malpractice insurance in order to practice in the state or have admitting rights at hospitals. The amount of required coverage varies from state to state.

Effects

The high cost of malpractice insurance causes an increase in the cost of health care as doctors and hospitals charge higher fees to make up for money lost in the cost of insurance. This in turn contributes to the increased cost of health insurance, explains the U.S. Department of Health and Human Services.

Source:

Insurance Information Institute: Medical Malpractice Insurance

U.S. Department of Health and Human Services: Confronting the New Health Care Crisis

Florida Malpractice: Are Doctors Required to Have Insurance?

More Information:

Information on malpractice insurance