A Medical Malpractice Insurance Policy Limit is the total amount of money that an insurer will pay to claims on behalf of the insured in any given year of the policy. These numbers are often in the millions, and for good reason. $1,000,000/$3,000,000, for example, is the most common Policy Limit that individual physicians choose. The first number, $1,000,000, is the total amount that an insurance carrier will pay on behalf of their client for any one claim. The second number, $3,000,000, is the total amount an insurance carrier will pay for any and all claims that happen in a single year.
In this example, an insured will be protected from any one claim that is below $1,000,000, as long as the total aggregate for the year is under $3,000,000. This means that, even if six $200,000 claims are filed in one year, the insured will still be covered by the insurer because the total cost of any one claim never went above $1,000,000, or $3,000,000 for all the claims in that year. Typically, damages or compensation demanded outside of Policy Limits are collected directly from the insured.
Physicians will almost always have multiple options when choosing a Policy Limit. However, higher limits typically lead to a more expensive overall policy, so price, claims history, and number of patients seen are often the most prominent factors when choosing a limit.
To find out what your Policy Limits are and what factors to consider for your practice, shoot us an email at email@example.com