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How Much Is Malpractice Insurance?

We all try not make mistakes, especially at work. A big mistake would likely land you in the hot seat with your boss and could ultimately cost you your job. But for the majority of professions, that’s about the worst thing that could happen.

Unless you work in health care. Then your big workplace mistake could cause someone a lot of pain—or even their life.

Amy is one example of what can happen when a health care worker makes a mistake. Back in 2003, she gave birth to a perfectly healthy baby boy at a Florida hospital. Amy says she’s had chronic back and leg pain ever since and was officially diagnosed was sciatica. After nearly 15 years of pain, she went in for a CT scan. Do you know what they found? A 3-centimeter needle lodged in her spine!

Amy’s lawyer discovered that the hospital where she gave birth had records of an unsuccessful spinal needle attempt during labor. And because it’s too risky to remove the needle, Amy will live the rest of her life in pain.

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So, Amy and her husband filed a medical malpractice lawsuit seeking more than $75,000 in damages, plus additional damages for years of treatment for the pain the needle has caused.

Unfortunately, Amy isn’t a unique case. Roughly $4 billion was shelled out for medical malpractice claims in the United States in 2018, with an average payment of $348,065.1

Doctors and other health care workers are humans, and humans make mistakes. One way for medical professionals to protect themselves from facing a lawsuit—and losing their license—is with medical malpractice insurance.

What Is Malpractice Insurance?

If you’re a health care professional and a patient sues you, malpractice insurance (aka professional liability insurance) is your shield. It will protect you if your mistakes result in bodily injury, property damage or medical expenses for your patient.

In Amy’s case, if the judge decides that doctor is responsible for leaving the needle in Amy’s spine and for the pain it’s caused, that doctor would be responsible for paying all of Amy’s damages out of pocket—if they don’t have medical malpractice insurance.

What Does Malpractice Insurance Cover?

Aside from paying any damages awarded to the patients, malpractice insurance will also cover the legal costs of going through a lawsuit. Think settlement costs and punitive damages, as well as legal fees, defense costs and the cost of expert witnesses to testify on your behalf. Without malpractice insurance, you’d likely have to pay for all of that on your own.

It’s worth noting, malpractice insurance won’t cover every case. It has to be specific to one of the following:

  • Surgical mistakes
  • Misdiagnosis
  • Medication mistakes
  • Childbirth injuries

Malpractice insurance typically can’t be used if the case involves illegal activity or sexual misconduct.

How Much Is Malpractice Insurance? 

It’s hard to give a clear-cut answer here because the cost of medical malpractice insurance varies a lot depending on your medical specialty, your location and many other factors.

Similar to most other insurances, the higher the risk, the more you’ll pay. For instance, a registered nurse responsible for taking blood might pay an annual premium of about $100, while a heart surgeon might pay between $30,000–50,000 a year.2,3

It also depends where you live. For example, a physician in New York City can expect to pay at least five to seven times more in medical malpractice insurance a year compared to a physician in California—even if they have the exact same job.4 State laws also vary surrounding malpractice insurance.

Should I Get Malpractice Insurance?

If you work in the medical industry, you should have malpractice insurance. This includes:

  • Surgeons
  • Physicians
  • Nurses
  • Pharmacists
  • Dentists
  • Chiropractors
  • Anesthesiologists
  • Technicians
  • . . . you get the idea

Even if you have employer coverage, it’s a good idea to have your own medical malpractice insurance policy. Your employers’ policy may not be enough to cover you in all cases, and it’s designed to protect the employers’ needs and interests, not yours. Yes, having your own policy can be expensive, but it’s the best line of defense to protect you from severe financial hardship and from potentially losing your livelihood.

Medical malpractice is no joke, so you want to make sure you’re being smart when getting this type of insurance. Work with an independent insurance agent who you can trust. They’ll research several different insurance companies to find you the best price based on your practice, location and other factors.

Dave’s Endorsed Local Providers (ELPs) are experts in the industry and can answer all your questions. Your insurance ELP will help you make the right decision for you and your budget. 

Contact an independent insurance agent today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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