Medical malpractice insurance is, without a doubt, one of the most essential aspects of your career in medicine. Even though California doesn’t explicitly require physicians to carry malpractice insurance under state law, most hospitals and other facilities have a minimum requirement that California providers must meet to be eligible to work for their organizations. Certain healthcare insurance providers even require doctors to have a valid malpractice insurance policy to participate in their healthcare plans, further increasing its importance.

It’s also important to remember that while California does have a cap on non-economic damages, there is no cap for lost wages. Additionally, the non-economic damages cap has recently been adjusted with plans to continue raising the cap over the coming years. This can leave physicians without malpractice insurance paying hundreds of thousands of dollars out of pocket in addition to legal fees. To prevent a potentially large financial loss, it’s important to invest in medical malpractice insurance.

Malpractice Insurance Cost In California

Like any other type of insurance, medical malpractice insurance premiums can vary dramatically based on different factors. Most notably, things such as the location of the practice, the doctor’s medical or surgical specialty, and the history of claims associated with that facility or provider. Additionally, the rate will vary by the type of coverage purchased. On average, physicians in California can expect to pay between $6,000 and $90,000 for their premiums, with psychiatrists paying the least and OB/GYNs paying the most.

Because each practice’s risk profile can vary, it’s important to speak with an experienced professional to get estimates tailored to your specific case.

The Most Common Types of Medical Malpractice Insurance

Claims Made

With a claims-made malpractice insurance policy, coverage is provided only if the policy was valid when the incident occurred and is still valid when the claim is filed. This means that if a claim is filed after the end of the policy, no coverage is provided, leaving the policyholder on their own. Claims-made policies are typically purchased in conjunction with a separate tail insurance policy to provide the best possible protection.

Occurrence

Occurrence malpractice insurance, on the other hand, provides coverage for incidents that took place during the policy year, no matter when the claim is reported. This prevents the need to have a tail policy in place at the end of the occurrence policy. Because of this, the premiums are often higher for this type of insurance, though they typically do not change while the policy is in effect. However, depending on your situation, an occurrence policy may cost less out-of-pocket overall due to only one premium being involved.

Tail

The majority of the malpractice insurance policies on the market are underwritten on a claims-made basis. This can leave providers on their own if a claim is filed after the end of the policy. To mitigate this risk, it’s important to secure a tail insurance policy. Tail policies provide coverage for a specific period after the claims-made policy ends and are usually a separate policy.

Telemedicine Insurance Considerations

The state of California Medical Board not only requires physicians to be licensed in the state to provide care to California residents, but they also hold them to the same standard of care as traditional healthcare providers. This means that telehealth providers retain the same responsibilities as in-person providers. Informed consent, maintaining privacy, and other duties must be carried out following accepted standards, meaning that malpractice insurance is still highly recommended. 

Due to the virtual nature of telehealth, there are often limitations surrounding prescribing or dispensing controlled substances and related services via telehealth. Failure to adhere to these guidelines can open providers up to additional liabilities on top of the liabilities associated with in-person care they are already subject to.

Tort Reform and Damage Caps

California passed the Medical Injury Compensation Reform Act (MICRA) in 1975, placing the state at the head of tort reform. This Act placed a cap of $250,000 on non-economic damages in regard to medical malpractice cases, while subsequent reform imposed limits on attorney’s fees, created shared liability rules, and required patients to notify the provider at least 90 days prior to filing a lawsuit of their intent to file. In 2023, the MICRA was modified to include an increase in the non-economic damages cap to $350,000 for the first time since the Act went into effect. These adjustments include planned increases over the next 10 years as well as annual inflation adjustments of 2% in subsequent years.

Claim Data

The National Practitioner Databank (NPDB) is a repository of medical malpractice claim information for healthcare providers in the United States. Following is a summary of data where we can observe the number of malpractice payments, adverse actions, and other disciplinary actions taken against healthcare professionals.

Year	Payment Count	Total Payments	Average Payment	Max Payment	Over 500K Count	Over 1M Count	Over 5M Count
1995	1562	$183,748,600	$117,637	$1,750,000	58	14	0
1996	1752	$222,286,250	$126,876	$6,050,000	89	10	1
1997	1837	$206,901,250	$112,630	$2,550,000	70	6	0
1998	1513	$212,267,650	$140,296	$6,850,000	75	15	1
1999	1644	$218,950,150	$133,181	$3,150,000	91	9	0
2000	1444	$199,970,200	$138,484	$2,350,000	82	8	0
2001	1506	$254,310,050	$168,865	$8,950,000	102	18	1
2002	1443	$252,199,500	$174,774	$8,150,000	117	18	1
2003	1419	$244,978,400	$172,642	$7,650,000	113	21	1
2004	1295	$231,513,550	$178,775	$4,450,000	111	15	0
2005	1245	$259,040,750	$208,065	$5,950,000	119	21	1
2006	1125	$256,191,800	$227,726	$6,250,000	120	23	3
2007	1049	$234,722,800	$223,759	$7,450,000	115	18	3
2008	1049	$221,869,150	$211,505	$7,450,000	117	12	2
2009	1057	$217,911,800	$206,161	$5,950,000	107	18	1
2010	971	$197,138,050	$203,026	$3,950,000	108	15	0
2011	957	$192,083,400	$200,714	$2,550,000	110	10	0
2012	982	$207,916,700	$211,728	$2,450,000	130	12	0
2013	1009	$257,398,750	$255,103	$12,500,000	147	18	1
2014	956	$206,634,250	$216,145	$2,250,000	125	13	0
2015	983	$246,783,050	$251,051	$9,750,000	133	24	2
2016	937	$213,775,700	$228,149	$1,950,000	124	12	0
2017	916	$239,270,500	$261,212	$7,050,000	143	20	2
2018	906	$251,996,550	$278,142	$8,750,000	154	28	1
2019	754	$214,747,500	$284,811	$6,450,000	129	18	1
2020	676	$189,931,050	$280,963	$4,750,000	117	17	0
2021	616	$188,848,700	$306,573	$4,950,000	121	16	0
2022	701	$206,602,750	$294,726	$3,450,000	134	16	0
2023	786	$300,203,200	$381,938	$27,500,000	166	26	3

However, there is no limit in California regarding the amount of compensation that can be recovered for economic damages. This includes lost income and future earning capacity, the costs of care necessitated by the malpractice, and any other measurable losses that can be attributed to the malpractice.