Malpractice insurance is a shield for protecting the skilled professional against lawsuits filed for committing malpractice. Malpractice insurance covers any skilled professional (such medical professionals like doctors, physicians, and nurses) for the liability claim. A skilled professional can be sued for malpractice when a client says that the professional failed to perform his or her specialized duties or neglects providing a high standard of care to the client.

Malpractice of any kind holds the skilled professional responsible for the damages caused to their patients. It is therefore very essential to award a fair compensation to the victim of malpractice for the losses. Malpractice insurance in fact shields the skilled professional from having to award the settlement out-of-pocket. The insurance company provides the compensation amount to the complainant based on the premiums bought by the skilled professional.

The amount paid for liability or malpractice insurance varies depending on area of specialization. Malpractice insurance premiums are paid by the skilled professional on the basis of geographical area and location of his or her profession, as well as on his or her responsibilities.

The insurance taken by the professional takes care of everything from attorney fees to court costs to settlement charges. For example, let's say that a cautious dentist opts for a premium policy. The insurer provides timely, accurate, cost-effective rates to this dentist who is a specialist in dental surgery. Then, while performing a surgery, the dentist is held responsible for injury done to a patient. The patient files a dental malpractice suit accusing him or her of negligence in surgery. Even though the hospital too will come under the purview of malpractice, the dentist performing the surgery is held the most responsible. He or she becomes liable to award for the damages. At such a stage, the insurance policy acts as a buffer. The payment made for the premium serves the dentist in awarding the settlement. Thus malpractice insurance is the door to reimbursement for the loss caused.