Medical malpractice insurance is one of the most important forms of professional protection in healthcare. Whether you are a physician, surgeon, advanced practice provider or practice owner, malpractice coverage plays a critical role in safeguarding your career, finances and professional reputation. 

Even highly skilled clinicians with excellent patient outcomes face the risk of lawsuits, as malpractice claims are often driven by adverse outcomes, miscommunication or patient expectations rather than true negligence.

As healthcare delivery becomes more complex and patient awareness grows, malpractice claims continue to shape how clinicians practice medicine. Understanding how medical malpractice insurance works, what it covers, how much it costs and how to choose the right policy is essential for anyone practicing clinical medicine. 

What is medical malpractice insurance?

Medical malpractice insurance is a type of professional liability coverage that protects healthcare providers against claims alleging negligence, errors or omissions in patient care. In simple terms, medical malpractice insurance helps cover the legal costs, settlements or judgments that may arise if a patient claims they were harmed by a provider’s actions—or failure to act—while delivering medical services.

Malpractice insurance typically covers:

• Attorney fees and court costs
• Expert witness expenses
• Settlements and jury awards (up to policy limits)
• Licensing board defense costs (in some policies)

Without malpractice insurance, providers could be personally responsible for hundreds of thousands—or even millions—of dollars in legal expenses and damages. For this reason, malpractice coverage is considered a standard and often mandatory requirement for practicing medicine in the United States.

What are the two types of malpractice insurance?

There are two primary types of medical malpractice insurance: claims-made policies and occurrence policies. Understanding the difference between these coverage types is essential, as they affect cost, long-term protection and what happens if you change jobs or retire.

Claims-made malpractice insurance provides coverage only if:

1. The alleged incident occurred while the policy was active, and
2. The claim is filed while the policy is active

If either condition is not met, the claim may not be covered unless the provider has tail coverage.

Occurrence malpractice insurance, on the other hand, covers any incident that occurred during the policy period—regardless of when the claim is filed. Even if the lawsuit is brought years later, coverage still applies if the event happened while the policy was active.

Both types are widely used, and each comes with advantages and tradeoffs depending on your career stage, specialty and employment structure.

Which is better claims made or occurrence malpractice insurance?

Determining which policy is better depends on your individual circumstances, but many providers prefer occurrence malpractice insurance because of its simplicity and long-term protection.

Occurrence policies:

• Do not require tail coverage
• Provide lifetime protection for incidents during the policy period
• Are easier to manage when changing jobs or retiring

Claims-made policies:

• Typically have lower upfront premiums
• Require tail coverage when leaving a position
• Are more common in employer-sponsored plans

While occurrence policies are often more expensive annually, they eliminate the potentially significant cost of tail insurance, which can equal 150–250% of a provider’s annual premium.

How does medical malpractice insurance work?

Understanding how coverage functions in real-world scenarios can clarify its value. A malpractice insurance example might look like this:

A patient undergoes a surgical procedure and experiences complications months later. The patient files a lawsuit alleging negligence two years after the surgery. If the physician carried occurrence coverage at the time of the procedure, the claim would be covered—even though the policy may no longer be active. If the physician had claims-made coverage, the claim would only be covered if tail insurance was in place.

Once a claim is filed, the insurer typically:

1. Assigns legal counsel
2. Investigates the claim
3. Covers defense costs
4. Negotiates settlement or proceeds to trial

Most malpractice claims never reach trial, but defense costs alone can be substantial, reinforcing the importance of comprehensive coverage.

Is medical malpractice insurance worth it?

For most clinicians, the answer is unequivocally yes. While premiums can be costly, the medical malpractice insurance cost per year is small compared to the potential financial and professional damage of an uncovered claim.

Even providers with low-risk specialties face exposure:

• Frivolous lawsuits still require legal defense
• Licensing board complaints can arise without malpractice
• Employment contracts often require coverage

In many states, physicians are statistically likely to face at least one malpractice claim during their career—even if they ultimately prevail.

Who should have medical malpractice insurance?

Any healthcare professional involved in diagnosing, treating or advising patients should carry malpractice coverage. This includes physicians, surgeons, anesthesiologists, nurse practitioners, physician assistants, dentists and even telemedicine providers.

When evaluating coverage options, many clinicians compare carriers and reputations. While rankings change over time, discussions around the top 10 medical malpractice insurance companies often focus on financial stability, claims handling, specialty expertise and policy flexibility.

Providers should ensure their insurer:

• Has experience in their specialty
• Offers strong legal defense resources
• Is financially sound

Malpractice insurance is not one size fits all, and coverage should align with both scope of practice and risk exposure.

Do doctors pay for their own malpractice insurance?

Whether a physician pays personally or receives coverage through an employer varies widely. Understanding how much does malpractice insurance cost for doctors often depends on employment structure.

Common scenarios include:

• Employer-paid coverage: Hospitals or groups provide malpractice insurance as a benefit
• Shared cost models: Employers pay premiums, physicians pay for tail
• Self-employed physicians: Fully responsible for premiums and coverage decisions

Employment contracts should clearly state:

• Type of policy (claims-made vs occurrence)
• Who pays for tail coverage
• Coverage limits

Failing to clarify these details can lead to unexpected expenses when changing jobs.

How much is malpractice insurance per month?

When broken down monthly, premiums can vary significantly. Many providers ask whether coverage is predictable and is malpractice insurance a fixed cost.

Monthly costs depend on:

• Specialty risk
• Geographic location
• Coverage limits
• Claims history

For some specialties, malpractice insurance may cost only a few hundred dollars per month. For others, particularly high-risk surgical fields, monthly premiums can reach several thousand dollars.

While premiums are relatively predictable year to year, they can change due to market conditions, claims trends or shifts in scope of practice.

Why is malpractice insurance so expensive?

One of the most common questions among clinicians is why premiums can be so high. Malpractice insurance cost by specialty is the biggest driver of price differences.

High-risk specialties such as obstetrics, neurosurgery and orthopedic surgery face:

• Higher claim frequency
• Larger settlement amounts
• Increased litigation complexity

Other cost factors include:

• State tort laws
• Jury award trends
• Reinsurance markets

States with tort reform measures often see lower premiums, while states without caps on damages may experience higher costs.

What is the best medical malpractice insurance?

There is no universal answer to what constitutes the best medical malpractice insurance, as the “best” policy depends on individual needs. However, strong policies typically share common features:

• Adequate coverage limits
• Clear consent-to-settle provisions
• Strong defense-only cost coverage
• Specialty-specific underwriting

Providers should evaluate insurers based on:

• Claims handling reputation
• Financial ratings
• Peer recommendations
• Flexibility as careers evolve

Choosing malpractice insurance should be treated as a strategic career decision—not just a checkbox requirement.

Medical malpractice insurance is a foundational element of a sustainable healthcare career. From protecting against financial risk to ensuring access to expert legal defense, the right coverage allows clinicians to focus on patient care with confidence. Understanding policy types, costs and coverage details empowers providers to make informed decisions that align with both their professional goals and personal risk tolerance.

As you evaluate your malpractice coverage—whether entering practice, changing jobs or reassessing existing policies—take time to review your options carefully and seek expert guidance when needed.

If you’re navigating a new role, contract or practice transition, explore additional resources designed to help healthcare professionals make informed career and insurance decisions with confidence.