What Are the Benefits of Personal Malpractice Insurance?
Professionals of various occupations carry malpractice insurance, just as most drivers purchase automobile insurance. Malpractice insurance protects people and businesses if their clients sue. For example, a patient might sue his dentist who negligently performed a root canal. The dentist's malpractice insurance will cover part of the claim.
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Basics
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Doctors, lawyers, accountants and physical trainers represent some of the professionals who commonly carry malpractice insurance. States can mandate minimum malpractice requirements. For example, Wisconsin compels all practicing chiropractors to carry malpractice insurance---at least $100,000 per occurrence/$300,000 for all occurrences.
Significance
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Malpractice insurance can help insulate a professional's assets from being jeopardized. If a lawyer lost a case because he forgot to file a motion before the deadline, his client might sue and recover $50,000. The insurance carrier would pay the judgment rather than force the lawyer to liquidate his assets (e.g., home, car, equipment) in order to pay his client out of pocket.
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Benefits
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Malpractice coverage typically includes defense costs. Thus, the lawyer who is sued will be defended by another attorney rather than be forced to defend himself.
Types
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Several factors, such as the number of past malpractice claims, influence the cost of malpractice insurance. Professionals who perform high-risk work, such as neurologists, often encounter expensive premiums.
Considerations
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Many professional organizations offer discounted malpractice insurance for members. The Washington D.C. Bar selects an insurance company and obtains lower comprehensive coverage since the Bar includes thousands of lawyers.
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