Navigating medical malpractice insurance can be complex, especially when misconceptions create confusion about what’s covered. Many healthcare professionals and practice owners make assumptions that could lead to costly mistakes. This article clears up five common misconceptions about entity medical malpractice insurance to help you make informed decisions.
1. It’s the Same as Individual Coverage
One common misconception is that entity medical malpractice insurance is identical to individual coverage. However, these policies protect different aspects of a medical practice.
- Entity insurance covers the entire medical practice, including legal claims against the business itself.
- Individual coverage protects a single healthcare provider from malpractice claims.
Even if providers within the practice have their own policies, the business still needs entity coverage to protect itself from lawsuits that involve the organization as a whole, legal fees, settlements, and damages.
2. It Only Covers the Business
While entity malpractice insurance protects the business, it can also extend to employees, such as doctors, nurses, and other healthcare providers—depending on the policy.
- If an employee is sued for malpractice while working under the entity, the insurance may cover legal fees and settlements.
- Coverage details vary by provider and may require additional endorsements to fully protect individual employees.
Understanding the full scope of your policy ensures there are no gaps in coverage.
3. It’s Unnecessary If Employees Have Their Own Insurance
Some believe that because individual healthcare providers carry malpractice insurance, the practice itself does not need separate coverage. This is false.
- Entity insurance covers risks related to the business, including claims that involve multiple employees, systemic issues, or administrative errors.
- Without entity coverage, the practice itself could be financially responsible for legal claims—even if employees have individual coverage.
Having both individual and entity policies ensures comprehensive protection for both the business and its staff.
4. Entity Insurance Is Always Expensive
Many assume that entity malpractice insurance is too costly for small or mid-sized practices. However, the cost varies based on several factors, including:
- The type of medical services provided
- The location of the practice
- The size and risk level of the organization
In some cases, group coverage under an entity policy may be more affordable than multiple individual policies. Comparing quotes from licensed insurance providers and evaluating policy options can help find cost-effective coverage without sacrificing protection.
5. It Covers All Legal Issues
Entity medical malpractice insurance does not cover all legal claims. While it protects against malpractice allegations, it typically does not cover:
- Fraud or criminal charges
- Employment disputes (e.g., wrongful termination, discrimination claims)
- General business liability unrelated to medical malpractice
To ensure full protection, medical practices may also need general liability insurance, cyber liability insurance, and business interruption coverage.
Choose the Right Entity Medical Malpractice Insurance
Understanding these misconceptions can help you select the right policy and avoid costly coverage gaps. If you are unsure about the best coverage for your practice, consult with a licensed insurance professional to ensure compliance with state regulations and industry standards.
Disclaimer:This article is for informational purposes only and does not constitute legal, financial, or insurance advice. Insurance coverage, costs, and requirements vary by provider and state. Consult with a licensed insurance professional or legal advisor to determine the best coverage for your specific needs. If this article is sponsored or affiliated with an insurance provider, that relationship should be disclosed in accordance with FTC guidelines.
Published by Anne C.
