Malpractice Insurance Restrictions

Malpractice insurance restrictions are in place in each state across the country. These limits and caps work to manage the cost of carrying malpractice insurance for doctors and hospitals. Limits also discourage the number of false claims of medical malpractice from individuals simply looking to get rich from a settlement or jury award.

Premiums for Doctors

• Medical malpractice insurance restricts the disciplines doctors may practice medicine in. This is because malpractice premiums vary with the risk associated with the doctor's specialty and experience is not a factor in determining the doctor's specific premium. For example, a surgeon in his first year is considered a risk on the same level with a surgeon working for 25 years, according to the Robert Wood Johnson Foundation. The restrictive cost of premiums may cause a doctor to choose a specialty that is more "affordable" than more high-risk areas of medicine.

Restrictions on Tort Damages

• While no restrictions on tort damages exist at the federal level, each state has enacted legislation that limits how much money a person may be awarded in any one medical malpractice suit. The limit for most states falls in a $250,000-$500,000 range per doctor and up to $1 million in damages per hospital. Some states, like Indiana, hold all licensed medical practitioners immune from civil liability, meaning patients are prevented from suing them in civil court for damages incurred because of a medical procedure.

Rate Increase Limitations

• State legislation also restricts how insurance companies adjust malpractice premiums. States like Connecticut require insurance companies to submit an application for a rate increase with the state insurance commissioner if the rate increase is over five percent. This allows states to manage medical malpractice premiums and help keep doctors in the state.