Medical malpractice insurance is required in many states if you're a medical provider, and it's a good idea to carry it even where it's not required. Malpractice insurance pays for court costs, settlements, and damages if you lose a case that goes to trial. All of these can be extremely expensive, so practicing with no insurance poses a great financial risk to you. While insurance premiums are typically high for malpractice insurance, the decrease in financial risk makes carrying insurance worth it.

You can use these four tips to help you find a medical malpractice insurance agency.

1. Right to Refuse Settlements

One of the most important things you should look for in your medical malpractice insurance is the right to refuse settlements made on your behalf by the insurance company. Defending against a medical malpractice lawsuit is extremely expensive, which is why carrying malpractice insurance is a good idea. Unfortunately, this can lead insurance carriers to settle with patients who file lawsuits against doctors, even when the doctor is clearly not at fault—if the cost of defending against the lawsuit would be greater than the cost of settling, it makes financial sense to simply settle.

Unfortunately, settling a medical malpractice claim can negatively affect your career. Malpractice settlements, much like lost malpractice cases, are documented in the National Practitioner Data Bank. Employers may look up this information when you're applying for openings, and multiple settlements may result in being denied employment. To protect your career, it's a good idea to choose an insurance plan that allows you to refuse settlements and fight the case in court instead.

2. Risk Management Courses

The medical malpractice insurance carrier that you select should offer free risk management courses. These courses keep you up-to-date on how to best practice defensive medicine, which decreases the likelihood that any patient will bring a malpractice suit against you. Risk management courses are very useful—in addition to learning how to avoid lawsuits, most carriers will also reduce your premiums if you complete these courses every few years.

3. Tail Coverage During Retirement

One of the unique factors surrounding medical malpractice insurance when compared to other forms of professional liability insurance is that malpractice claims aren't always filed right away. Patients may not file lawsuits for months or years after they received care, since it may take some time for a medical error to become apparent.

Most malpractice insurance operates on a claims-filed basis, which means that your coverage only extends towards claims filed during the period that you are insured. The insurance doesn't cover you against future claims. To be protected against these claims, you'll need to purchase tail coverage.

The premiums for tail coverage can be quite high, and you'll need to carry it even after you retire—after all, patients may file suits against you for care that they received shortly before your retirement. One way that you can avoid this cost is to select an insurer that offers free tail coverage after you retire. You'll normally need to carry insurance with them for several years before the coverage applies to you, but you'll save money in retirement while also protecting yourself from the financial liability that comes with potential malpractice lawsuits.

4. Long Application Process

Finally, the medical malpractice insurance carrier you select should have a fairly intense application process. While this makes applying for coverage more tedious, it means that the insurance carrier is doing an excellent job of vetting the medical providers that they're giving malpractice insurance coverage to.

The risk pool for malpractice insurance isn't very large, so it's important to make sure that the fellow providers in your pool are also practicing defensive medicine. This means that premiums will be lower since they aren't having many lawsuits filed against them, and it also means that the insurance carrier will be more financially stable due to the decreased risk of having to defend numerous expensive claims in a single year.

Overall, make sure that your medical malpractice insurance carrier has your interests in mind. They should allow you to refuse settlements and provide you with risk management training, which helps to protect your career. The premiums that you pay for malpractice insurance coverage may be substantial, but carrying it is an important part of protecting yourself financially—medical malpractice lawsuits are often extremely expensive for providers to defend against, and carrying insurance helps mitigate the financial risk.