Malpractice Insurance


Professional liability insurance, also called professional indemnity insurance but more commonly known as errors & omissions in the US, is a form of liability insurance which helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.

Malpractice Insurance

What is ‘Malpractice Insurance’

A type of professional liability insurance purchased by health care professionals (and sometimes by other types of professionals, such as lawyers). This insurance coverage protects health care providers against patients who sue them under the claim that they were harmed by the physician’s negligent or intentionally harmful treatment decisions.

Explaining ‘Malpractice Insurance’

Premiums are usually based on the physician’s specialty and geographic location but not on claims experience. This means that even if a physician has never been sued, he or she can end up paying extremely high premiums. The premiums can become high because of factors such as amount of coverage needed, claims severity, claims frequency, location of practice and laws in the area.

Further Reading

  • Economics of oligopoly: Medical malpractice insurance as a classic illustration – [PDF]
  • Impact of hospitalist care on hospital malpractice premiums using California hospital data – [PDF]
  • The relationship between the markets for health insurance and medical malpractice insurance – [PDF]
  • Medical Malpractice Insurance and the Emperor's Clothes – [PDF]
  • Damages caps, insurability, and the performance of medical malpractice insurance – [PDF]
  • “Crises” in medical malpractice insurance: Evidence of excessive price-cutting in the preceding soft market – [PDF]
  • The forgotten third: liability insurance and the medical malpractice crisis – [PDF]
  • State responses to the malpractice insurance “crisis” of the 1970s: an empirical assessment – [PDF]
  • The economic consequences of medical injuries: implications for a no-fault insurance plan – [PDF]
  • The causes of the medical malpractice crisis: an analysis of claims data and insurance company finances – [PDF]