A Doctor’s Guide to Selecting a Medical Malpractice Insurer

As a doctor, it's not a question of if you'll face a lawsuit, but when. In certain high-risk specialties, over two-thirds of doctors will encounter a claim, and 80 percent of dentists made at least one malpractice payment between 2016 and 2023.* Risk also climbs with time in practice–the longer you practice, the more likely you'll eventually face a suit.† And litigation risk is rising overall: From 2013 to 2023, medical malpractice verdicts awarding $10 million or more increased roughly 67 percent.

Choosing the right malpractice insurer—whether for the first time or additional coverage—is one of the most important decisions you'll make. You need a strong, proactive partner when your reputation and livelihood are on the line.

Different Types of Medical Malpractice Insurance Coverage

• Primary professional liability coverage is your main liability insurance policy and it can provide you with some financial protection if you’re sued—the amount of coverage you have is determined by the limits you select. Even if you’re insured by an employer, you may want to purchase your own coverage so you can control the terms of your policy. Independent clinicians must have this coverage, but others often select this type of policy to ensure they have protection in addition to their employer’s coverage to protect their own reputation.
• Vicarious liability insurance is optional coverage you should consider if you own your own practice and have employees, independent contractors, or others acting on your behalf because you could be held responsible for their acts or omissions. This is an endorsement added to your primary liability policy.

Different Types of Policies

Two types of coverage—claims-made or occurrence policies—largely differ based on when they provide coverage for a claim made against you and how much coverage they provide over the years you have the policy.

Occurrence Coverage

Occurrence coverage covers you for any incident that occurs (or that did occur) while the policy is, or was, in force, regardless of when the incident becomes a claim.

Benefits of occurrence coverage:

• You’re covered for a claim no matter when it occurred, as long as you had an in-force policy at the time of the claim.
• You don’t need to purchase tail coverage, which can be costly.

In figure 1, the incident occurs within the policy period so even though it was reported after the period ended or if the policy was cancelled, it’s still covered by the occurrence policy.

Claims-Made Coverage

A claims-made policy provides coverage for claims arising from incidents that occur and are reported to your insurance company while the policy is in force. This coverage also extends to incidents that happened on or after the policy’s retroactive date. Once a claim is reported within the policy period and meets the policy’s conditions, the insurer assumes responsibility for the ultimate resolution of the claim or lawsuit, provided it falls within the policy’s terms and coverage limits.

Benefit of claims-made coverage:

• Initially, claims-made policies are less expensive than occurrence policies.

In figure 2, the incident occurs and is reported during the policy period, so it would be covered by the claims-made policy. It would also be eligible for coverage if it was reported during the extended reporting period (tail).

Tail Coverage

Tail coverage, or extended reporting period (ERP) coverage, protects you against all claims that arise from professional services performed while the claims-made policy was in effect but were reported after the termination of the policy. Some insurers offer this feature free of charge for retiring doctors who meet certain requirements.

In this example, the claim is filed after the policy’s retroactive date and before the end of the policy period, so it’s covered. If the clinician had purchased tail coverage and the claim was filed during the ERP, it would also be covered.

What Type of Carrier Should You Choose?

Professional liability coverage is offered through three primary carrier structures, each with a distinct ownership model and governance approach.

Stock insurance companies are owned by shareholders and publicly traded. Profits are returned to those shareholders rather than to policyholders.

Member-owned companies, structured as reciprocal interinsurance exchanges or mutual insurers, are owned and controlled by their members and typically governed by a board of fellow healthcare professionals. Members have a vote in company decisions, and profits are returned to them in the form of dividends.

Risk retention groups (RRGs) are designed to cover risks that are difficult or costly to insure through traditional carriers. They are regulated at the federal level but must also comply with the insurance laws of their state of domicile, a structure that affords them greater flexibility in pricing and underwriting than other carrier types, provided they meet federal requirements such as publishing an annual financial statement. Before purchasing coverage from an RRG, physicians should review this statement carefully and confirm that the domiciled state holds the company to solvency and management standards rigorous enough to ensure it can meet its obligations to policyholders.

Questions to Ask When Evaluating a Carrier

Before choosing a carrier, weigh the premium against the protection, service, financial strength, and stability it offers. Review its claims defense performance, risk management services, underwriting standards, and actuarial discipline—and consider its mission and leadership, including whether decision-makers are themselves healthcare professionals.

If a claim is filed against me, how will the insurer defend me?

A malpractice lawsuit is one of the most difficult experiences a doctor can face, and litigation can drag on for months or years. Understanding the process and the insurer's role in it helps ease that uncertainty. Look for a carrier that will:

• Assign an experienced claims specialist and dedicated defense counsel promptly.
• Contact you quickly to discuss allegations and next steps.
• Keep you informed and supported throughout litigation.
• Require your consent before settling any case.

How do I determine a carrier's financial strength?

An insurer must have the resources to pay claims now and in the future. Key indicators include:

• Financial strength ratings (AM Best Company, Fitch Ratings): Independent assessments of an insurer's stability and ability to pay claims, even under heavy or costly claim volume.
• Assets: Particularly admitted assets, which can be liquidated to pay claims.
• Surplus: The cushion between assets and liabilities that lets an insurer absorb unexpected losses.

What additional tools and resources will the insurer provide?

Beyond paying claims, a strong partner should offer CME/CE, risk management services, and patient safety programs, plus:

• Data on liability trends specific to your specialty.
• Advocacy for medical liability reform.
• Customized coverage solutions that reduce cost and risk.

Will my coverage needs actually be met?

Confirm the policy includes adequate limits and covers administrative actions (Medicare/Medicaid, licensing boards, credentialing, EMTALA, DEA), cybersecurity issues, and HIPAA violations. Also look for a strong defense team, a consent-to-settle guarantee, litigation training, portability across jobs, wage loss/court cost coverage, and deposition representation even if you're not a named party.

Does the insurer have experience in my practice location?

The strongest carriers combine national scope—resources to spot emerging risks and respond with innovative solutions—with local expertise. A multistate presence often means a portable policy that follows you wherever you practice.

Evaluating a Carrier’s Financials

Evaluating a carrier means reviewing its corporate ownership and structure, financial strength, and coverage options. Its annual report and financial statements—specifically net written premium, loss reserves, and surplus—will show whether it has the resources to meet current and future claims.

Net written premium is the premium an insurer retains after paying for reinsurance, typically shown on its statement of income. Because professional liability carriers usually pay out 100 percent or more of premium in losses and expenses, compare net written premium to surplus to confirm the insurer isn't over-leveraged relative to its capital base.

Loss reserves are funds set aside for unpaid claims, both reported and unreported, representing the insurer's best estimate of future indemnity payments and litigation costs. Since actual claims costs may not be known for years, reserves are a key signal of whether a company can meet its future obligations.

Surplus is the amount by which assets exceed liabilities, reflecting an insurer's working capital. A substantial surplus allows a company to absorb unanticipated losses while maintaining its financial strength.

Ratings from analysts like AM Best Company or Fitch Ratings assess an insurer's ability to pay future claims based on its profitability and financial soundness–higher ratings generally indicate stronger, more profitable companies.

Company size matters too, even though it isn't directly reflected in ratings. A small insurer can post equal or higher ratings than a much larger one due to stronger margins, yet still be less equipped to withstand large-scale losses. Weigh ratings in that context.

How Much Insurance Should You Carry?

The right amount of liability coverage depends on your specialty, the procedures you perform, and the type and location of your practice, group, or entity. A few factors shape the decision:

• State regulations: Each state sets its own insurance department rules and restrictions.
• Coverage limits: Standard policies include both per-claim and per-policy-period (annual aggregate) limits, with available limit options varying by state.
• Patient compensation funds (PCFs): States with PCFs may set minimum insurance requirements and coordinate coverage with your carrier.

Ultimately, the right limits depend on your state's laws, your assets, your risk tolerance, and what you can afford. An experienced agent or your personal attorney can help you determine the coverage that's appropriate for you.

Evaluating a Carrier’s Management Philosophy

A carrier's management philosophy is reflected in its underwriting, claims management, risk management, and actuarial practices. Together, these shape both its pricing and the level of service it provides policyholders.

Underwriting standards should be set by experienced underwriters who thoroughly evaluate doctors' applications. A financially stable carrier declines coverage for unqualified applicants whose practices could result in indefensible claims.

Claims management should start with prompt review by an experienced claims specialist. Look for a carrier that mounts a strong defense against nonmeritorious claims, while moving to settle quickly and fairly, with your consent, when negligence is clear. A guaranteed consent-to-settle provision, where permitted, ensures the carrier can't settle without your written approval. The carrier should also provide clear guidance on what to do if a claim arises, along with ongoing support.

Patient safety and risk management should be built into your coverage. This includes CME/CE, seminars, webinars, and on-demand courses; disclosure and health literacy resources; and personalized risk management support from experienced clinical risk managers. The best insurers take a data-driven, collaborative approach to reducing adverse events and improving patient satisfaction.

Actuarial practices, grounded in probability, loss distribution, risk theory, and forecasting, should be reviewed on an ongoing basis so premiums stay accurate as the liability environment evolves.

About The Doctors Company

Since 1976, The Doctors Company has been committed to advancing, protecting, and rewarding the practice of good medicine. We protect over 175,000 members and insureds nationwide, backed by $12 billion in assets, and we are rated A by AM Best and Fitch Ratings. Our national perspective and local experts help us anticipate emerging threats and deliver relevant solutions, wherever and however you practice. More than 90 percent of members report incredibly high satisfaction with our efforts to prevent claims and defend their careers.

Defense and Advocacy

Your defense starts with a promise to never settle without your consent, subject to policy terms and applicable law. If you're sued, seasoned advocates support you through the entire litigation process. Our award-winning Government Relations team is the industry's only medical liability advocacy program covering all 50 states and the federal level, working to protect existing reforms and enact new measures that limit liability exposure.

Data and Patient Safety

Members get access to extensive resources, including patient safety self-assessment tools that help reduce malpractice allegations. Our claims database, the largest in the industry, gives us an unmatched view of specialty-specific litigation trends, driving the innovative safety tools we offer.

Rewards and Coverage Features

• The Tribute® Plan rewards doctors at retirement for a career spent practicing good medicine. We've paid more than $200 million in awards, with the highest award to date of $264,808.‡
• A generous multiyear dividend program has declared $500 million to eligible members to date.
• Free tail coverage is available for qualified members upon retirement, disability, or death.
• MediGuard coverage is automatically included, providing legal representation for administrative actions involving Medicare/Medicaid, licensing boards, credentialing reviews, EMTALA, and the DEA.

For members who demonstrate a strong commitment to their specialty, we go above and beyond by offering premium credits and discounts. We are also endorsed and sponsored by many of the nation’s most prestigious medical organizations.

The Bottom Line

Choosing a medical malpractice insurer is one of the most consequential decisions you'll make in your career. By carefully evaluating a carrier's ownership structure, financial strength, management philosophy, and coverage options, you can find a partner who will stand behind you when it matters most.

Don't wait for a claim to test your coverage; make sure you have the right protection in place today. Get a quote and find out how we can help safeguard your practice and your peace of mind.

Frequently Asked Questions

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*Estimated based on exposures from definitive data with unique NPI numbers present in the procedures field and paid claims from unique practitioners in the National Practitioner Data Bank.

†Guardado JR. Policy research perspectives: Medical liability claim frequency among U.S. physicians. American Medical Association, 2017.

^‡Policies underwritten by The Doctors Company Risk Retention Group are not eligible for the Tribute Plan or dividends. Tribute Plan projections are not a forecast of future events or a guarantee of future balance amounts. For additional details, see thedoctors.com/tribute