Med Mal Policy Features You May Feel Strongly About, Pt 3
Defense Costs: Inside/Outside Limits. Any physician that has been through a claim, or is going through a claim, spends a lot of time going over the features of the med mal insurance policy that he or she is covered under and worrying if the coverage will be sufficient. While we understand that reading and understanding your policy is probably not at the top of your list of Things to Do, we advise reviewing it and understanding it completely before you need it (and before you even purchase it). One of the most important considerations you can have when you are purchasing your med mal policy is if the defense costs are inside the limits of your policy or outside the limits of your policy. Before we get into that, let’s discuss defense costs. What does that include?
The cost of defending a med mal claim typically includes the lawyers’ fees, the expert witness fees, and incidental costs, like deposition costs, court fees, etc. These are the costs that the med mal company bears during the claim process. It should be noted that defense costs do NOT include the time a physician loses by being off work, having to defend him or herself in a claim.
Now that we know what generally constitutes defense costs, you need to know if your med mal policy includes the defense costs within the limits of the policy. If your policy states that defense costs are “inside the limits,” this means that any payout AND defense costs must be within the limit stated. If your policy states that defense costs are “outside the limits,” this means that defense costs are considered separate from any payout and are covered separately. For instance, if your policy states that defense costs are inside the limits and the limits of your policy are $1 million per claim, and you lose a claim and have to pay $1 million in damages, you will be responsible for the all of the defense costs that were spent in order to defend your claim (because they are over the $1 million dollars allotted).
Most, if not all, of the large admitted malpractice liability insurance carriers, like ProAssurance, include defense costs outside the limits and it is usually not an issue that has to be considered or worried about. If you are shopping for a surplus lines insurance policy, it is important to discuss all of the features of the policy, including defense costs, so a claim does not take you by surprise.
As always, we suggest that you ask questions and know your med mal policy before you purchase it and before you face a claim. The agents at MyMedicalMalpracticeInsurance.com are here to help you, answer your questions and get you the policy you want.