Telemedicine is becoming more commonplace. Patients and doctors are demanding it because of its lower costs, increased convenience, and effective care delivery at the point of need.

The rise in the popularity of telemedicine is startling. Today, more than 116 million people consult doctors online, compared to 59 million in 2019.

Because of this, telemedicine providers need to change their approach to insurance. Coverage tailored specifically for these kinds of patient interactions is becoming more essential.

Fortunately, insurance brokers can help practitioners navigate this new and challenging market. Brokers provide telemedicine malpractice insurance to healthcare providers, protecting all stakeholders.

This guide outlines what malpractice means in a digital environment. It explores some state-specific considerations for telemedicine providers and insurance brokers’ role in supporting practices offering these services.

Finally, this guide explores the key benefits of partnering with a telemedicine insurance broker. By the end, you should better understand how everything works.

Understanding Malpractice Insurance For Telemedicine Practices

Medical malpractice is a significant risk for healthcare practitioners. Patients can make claims against doctors, alleging a poor quality of treatment and issues relating to their health outcomes.

Because of this, medical professional liability (MPL) insurance is critical. It mitigates risks by covering healthcare providers in the event of a successful legal case against them.

For individual doctors, nurses, and other practitioners, such insurance can be career-saving. Insurers pay the vast bulk of any compensation, with those in the care industry only picking up a small portion of the tab (if anything).

Unfortunately, many insurers only cover health practitioners for in-person patient interactions. They don’t explicitly mention telemedicine coverage.

Because of this, it is essential to get MPL that extends to digital interactions if helping patients online. A blanket policy isn’t always advisable. Ideally, you want a policy that applies to states since the rules can vary substantially.

Most providers share insurance limits under a single MPL policy covering employed and contracted clinicians. However, some states force practices to put individual insurance limits in place, which complicates overall policy layouts.

E&S Policies

Many telemedicine providers use excess and surplus lines (E&S) policies for MPL coverages. These offer a suite of advantages:

• Cover risks that conventional options don’t, including malpractice via telemedicine
• Permit more flexibility in terms and conditions
• Allow customized endorsements for unique exposures (e.g., sexual abuse)

Note: E&S policies don’t fall under the same state protections against carrier default. It is important to choose a strong, reputable carrier.

Challenges Of Shared Vs. Individual Limits

Some states require individual minimum limits on physicians, especially where Patient Compensation Funds (PCFs) are involved.

To meet these requirements, insurers may issue endorsements that supplement shared policies with additional individual coverage.

State-Specific Considerations For Telemedicine Providers

State requirements vary based on:

• PCF participation requirements
• Use of admitted vs. non-admitted carriers
• Coverage limits on individual physicians

This complexity makes it difficult to ensure continuous MPL coverage, especially across multiple states.

Understanding Patient Care Funds (PCFs)

PCFs are state-run funds that:

• Cap damages
• Require individual limits on physicians (no shared limits)

This limits cost-saving strategies and adds complexity for telemedicine providers trying to serve broader regions.

Balancing Admitted And E&S Insurance Coverage

Admitted carriers must:

• Follow state regulations
• Offer financial protections (e.g., state backing if insolvent)

E&S carriers offer:

• Greater flexibility
• Custom policies better suited to telemedicine

Example: Kansas requires participation in its Health Care Stabilization Fund, which most E&S carriers don’t support.

Should You Operate In PCF States?

PCF participation has pros and cons:

• Pros: capped damages, broader protection
• Cons: more paperwork, added costs

Low patient volumes may make participation financially unjustifiable in some states.

How To Customize Insurance Solutions For Cross-State Telemedicine Operations

Work with experienced brokers who can:

• Design multi-layered coverage
• Ensure compliance with specific state regulations

Brokers can help you balance cost, coverage, and compliance based on your unique situation.

How Insurance Brokers Can Support Telemedicine Providers

Brokers assist with:

• Selecting appropriate policies
• Managing costs through continuous analysis
• Evaluating telemedicine risks
• Helping practices expand to new states

They also monitor state regulations to avoid non-compliance and may recommend supplemental policies to meet individual limit mandates.

Customizing Coverage For Specific Risks

Cybersecurity risks: Insurance can defend against data breaches and HIPAA violations.

Cross-jurisdictional malpractice: Ensures coverage even if lawsuits arise from out-of-state patients.

New medical models: Protection for innovations like AI and remote diagnostics.

Cost and Coverage Optimization

• Layering admitted and E&S policies for balance
• Cost-benefit analysis for PCF participation

Advocacy During Claims and Audits

Brokers can represent telemedicine providers during claims or audits, especially when complex multi-state issues arise.

Summary Of Benefits Of Working With A Telemedicine Insurance Broker

• Deep expertise in MPL and regulatory compliance
• Custom coverage recommendations
• Cost and risk optimization strategies
• Support for PCF compliance and multi-state expansion

MedMal Advisors is a leading broker in this area. We simplify complex insurance challenges, providing tailored recommendations that balance cost, flexibility, and compliance.