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Medical Malpractice Insurance Coverage Basics

Posted on February 28, 2022 in

Like many other civil lawsuits, insurance coverage plays an important role in medical malpractice claims. After a healthcare provider negligently harms a patient and that patient begins to pursue compensation for his or her injuries, the provider’s medical malpractice insurance will likely become involved in the case.

If you are pursuing a medical malpractice claim, it is important to understand this coverage and how it affects your right to recover compensation. Here are the basics of medical malpractice insurance policies.

What Does Medical Malpractice Insurance Cover?

When a doctor injures a patient, he or she is financially liable for any damages that the patient experienced, such as additional medical care, lost wages, and pain and suffering. These damages can total hundreds of thousands of dollars and higher, which can be difficult to pay for out of pocket.

Medical malpractice insurance pays for the patient’s damages on behalf of the healthcare provider, up to a certain amount. In Illinois, the average policy limit for medical malpractice insurance is up to $1 million per claim with an annual aggregate cap of $3 million. Policyholders can choose to purchase higher amounts of coverage if they choose.

There are two types of medical malpractice insurance policies: claims-made and occurrence-made.

  • Claims-Made Policies: This coverage will protect the policyholder as long as he or she held the insurance when the alleged negligence occurred and when the patient files the medical malpractice claim.
  • Occurrence-Made Policies: This type of policy will protect the policyholder for acts of negligence that occur when he or she held the policy. When the patient files the claim is irrelevant.

Does Illinois Require Medical Malpractice Insurance?

Illinois law does not require healthcare providers to carry medical malpractice coverage. However, some hospitals may require medical professionals to hold this insurance in order to work at the facility.

If a healthcare provider does not have medical malpractice insurance and injured a patient, he or she would be solely liable for the damages that the patient experienced. As a result, many professionals choose to purchase this coverage to protect their interests.

Pursuing Compensation through an Insurance Claim versus a Lawsuit

Many victims of medical negligence wonder if they should pursue compensation through a lawsuit or insurance claim. If you find yourself in this situation, it is important to consider the pros and cons of both legal pathways.

Insurance claims are typically faster than a lawsuit, which can take a year or longer to reach settlement. However, you can only claim compensation up to the provider’s policy limits. If your damages exceed these limits, you may experience financial hardship later on.

While medical malpractice lawsuits are lengthy processes, you can recover compensation for the full extent of your damages. In some cases, it may be best for you to pursue a lawsuit from the beginning. In others, you may want to file an insurance claim first before escalating your case to a lawsuit if necessary.

Different paths to compensation are appropriate for different cases. If you plan on pursuing legal action against a medical provider, it is important to speak to an attorney as soon as possible about your legal options. Contact a Chicago medical malpractice lawyer to discuss your case and identify your optimal path to maximum compensation.