5 Factors That Affect Malpractice Insurance Costs

Malpractice Insurance Costs

Doctors often make the correct diagnosis 85 percent of the time. But what about the remaining 15 percent? This is where you get a call from your patient’s attorney about a malpractice claim or lawsuit.

Anything can go wrong when caring for the patient; that is why malpractice insurance exists for protection. Unfortunately, it can be very pricey, and various factors, like location and types of specialties, can affect the costs. If you plan to get protection, continue reading to know what factors impact your average malpractice insurance cost.


Because each state has its own set of tort liability rules, the medical malpractice insurance cost varies. Rates may vary significantly based on the State and/or County in which you practice. States that have enacted significant tort reform, such as California and Texas, have some of the lowest malpractice insurance rates in the nation, despite having a big physician population. 

Each state has a mandated set of limitations that a physician’s insurance policy must include. For instance, Florida doctors are limited to $250,000/$750,000, while Illinois physicians are limited to a minimum of $1,000,000/$3,000,000. In general, the greater the restrictions, the higher the premium.

Malpractice Insurance Cost by Specialty

Higher-risk specialties are more likely to face malpractice insurance claims and will pay a higher yearly premium. For example, obstetricians and surgeons tend to have a higher premium than primary care doctors. 

Claims History

Almost every carrier will provide some loss-free or claim-free discount. Savings vary by carrier; however, most provide discounts up to 20% for excellent claim history. 

Most insurers will examine a physician’s claim history for the past ten years. The underwriter will consider a physician’s claim history when deciding whether to approve or reject an application for coverage.

Competition Among Carriers

Insurance firms fight for market share, profit margins, and volume in a given state. Carriers generally develop and set premium rates based on actuarial study and with the permission of the state’s insurance department. 

However, carriers sometimes apply for reduced premium rates to gain market share and volume of policyholders. They do this by providing policies at a lower price than their competitors. This is more prevalent in states with a large number of medical malpractice insurance carriers. 

Hours Worked

Anybody who works more than 20 hours per week on average is full-time. Anyone who works less than 20 hours per week is called part-time. 

Part-time discounts vary from 20% to 50%, depending on the carrier. However, not all carriers provide part-time savings for surgical cases.

How Much Does Malpractice Insurance Cost?

A medical malpractice insurance cost is typically around $7,500 per year. Annual premiums for surgeons often range between $30k and $50k. Chiropractors often use chirosecure to find their rates and obtain coverage.

Malpractice insurance expenses amount to about 3.2 percent of the average physician’s salary. Although malpractice insurance is higher for surgeons and obstetricians, they have a high salary to compensate.

How Much Malpractice Insurance Do I Need?

The answer to this question depends on the physician’s specialization and geographic area. However, some hospitals also determine the amount of malpractice that is needed. Therefore, even if a physician has never been sued, they may still have a costly insurance rate.

Malpractice insurance cost varies from one doctor to another. It’s also a very touchy topic that not a lot of doctors like to discuss in public. If you want to know more about malpractice insurance, check out our blog posts for more information.