Medical malpractice insurance
Medical malpractice insurance is professional liability coverage for physicians, other licensed health care professionals and health care facilities. It protects you against covered legal liability for injury, death or other loss caused by alleged negligence or wrongful professional services, and generally pays covered defense costs, subject to the policy's limits, exclusions and reporting rules.
Also called: malpractice
Medical malpractice insurance is the policy that answers when a patient claims your care, or your failure to give care, caused harm. It can pay settlements, judgments and defense costs for covered claims involving bodily injury, death, medical expenses, property damage or personal injury such as mental anguish, according to the NAIC (opens in a new tab). It is a form of professional liability insurance, and the NAIC treats "medical professional liability" as another name for the same coverage.
How a malpractice claim gets paid
Connecticut publishes averages from closed malpractice claims. Claims closed from 2019 through 2023 numbered 2,387, and 1,294 of them had an indemnity payment, according to the Connecticut Insurance Department's 2024 report (opens in a new tab). Commercial insurers paid an average of $747,434 in indemnity and $80,628 in defense and related claim expenses. Applied to one claim, the money flows like this:
Hover or tap a row to highlight it.
| Item | Amount |
|---|---|
| Indemnity paid to the claimant | $747,434 |
| Defense counsel and related expenses | $80,628 |
| Total insurer payment ($747,434 + $80,628) | $828,062 |
| Your share if covered, within limits, no deductible | $0 |
These are reported Connecticut averages, not a prediction for any one claim or a premium figure. Your share rises if you carry a deductible or self-insured retention, if defense costs count inside a limit that runs out, or if part of the loss is not covered. The average indemnity alone is higher than Connecticut's $500,000 per-person minimum, so the limit you carry decides how much of a large claim stays insured.
Claims-made, occurrence and other choices
Occurrence coverage responds when the medical incident happens during the policy period, even if the claim comes years later. Claims-made coverage responds when the claim is reported during the policy period, and only for incidents after the policy's retroactive date. A later retroactive date can leave earlier incidents uninsured. Prior-acts coverage carries earlier exposure onto a new policy when the new insurer accepts the old retroactive date.
When a claims-made policy ends, extended reporting coverage, often called tail coverage, lets you report covered claims from the earlier period. One California-filed form includes a 60-day basic reporting extension and offers longer tail coverage for separate purchase, according to the California Department of Insurance (opens in a new tab). Tail coverage extends reporting time; it does not cover new incidents.
Other choices change what is left for a settlement. The per-claim limit caps one claim and the aggregate caps the policy year. Defense inside the limit reduces the money left for indemnity, while defense outside the limit does not. Excess layers apply after primary limits are used up. Price depends on specialty, procedures, location, claims history, limits, coverage trigger and years of exposure, and higher limits generally raise the premium.
Where you see malpractice coverage
The term belongs to business insurance for health care: individual coverage for physicians, dentists, nurses, therapists, pharmacists and chiropractors, group practice coverage, facility coverage for hospitals and clinics, and professional liability sections of package policies. It does not mean the medical payments coverage in an auto, homeowners or health policy. Our comparison of general liability vs professional liability insurance shows why a general liability policy is a different product.
The declarations page lists the named insured, limits, deductible or retention, retroactive date and policy form. Definitions cover "claim," "medical incident" and "professional services," and exclusions reach intentional or criminal acts, services outside your scope and known claims. Conditions set notice, cooperation and consent-to-settlement duties, and endorsements add tail coverage, prior acts or added professionals. You may also meet the term on a certificate of insurance a hospital requests, a renewal notice or a reservation-of-rights letter.
What Connecticut and New York require
Connecticut makes coverage a licensing matter for physicians. Conn. Gen. Stat. § 20-11b (opens in a new tab) requires each licensed physician who provides direct patient care, with statutory exceptions, to carry professional liability insurance or another indemnity arrangement of at least $500,000 per person per occurrence with an aggregate of at least $1.5 million. Failing to keep it can lead to restriction, suspension or revocation of the right to practice under Conn. Gen. Stat. § 19a-17 (opens in a new tab).
New York has no general statutory insurance requirement for ordinary physician licensure, according to a New York Department of Financial Services opinion (opens in a new tab). A disciplined physician placed under certain monitoring must carry at least $2 million per occurrence and $6 million per policy year under N.Y. Public Health Law § 230 (opens in a new tab). New York hospitals commonly require coverage for admitting privileges, and N.Y. Insurance Law § 5502 (opens in a new tab) authorizes primary and excess malpractice arrangements for eligible physicians, dentists and podiatrists.
Questions to ask an agent or insurer
- Is the policy claims-made or occurrence, and what is the retroactive date? That decides whether the incident date or the reporting date triggers coverage.
- Are defense costs inside the limit or paid in addition to it? Defense inside the limit shrinks what is left for a settlement.
- Do the per-claim and aggregate limits meet my state, hospital, employer or contract requirement? A policy can satisfy a statute and still fall short of a credentialing rule.
- What happens if the policy is canceled, not renewed, replaced or I retire? You may need tail coverage or a replacement that keeps your retroactive date.
- When must I report a patient demand, notice of intent, subpoena or lawsuit? Claims-made policies depend on timely reporting.
Frequently asked questions
Short answers to questions providers often ask.
Does a bad medical outcome automatically mean malpractice?
No. Insurers spend substantial amounts investigating and defending claims over adverse outcomes that were not caused by negligence, according to the NAIC (opens in a new tab). Such a claim can still create defense costs and appear in your loss history.
Can the insurer settle without my consent?
It depends on the policy's consent provision. Settlements are sometimes made without the physician's consent, according to the Connecticut closed-claim report, and a settlement can affect renewal underwriting and professional reporting.
Do I need tail coverage?
You may if you have claims-made coverage that is ending and later claims could arise from incidents during that period. Replacement coverage that keeps your retroactive date can serve the same purpose, so compare both before the policy ends.