Malpractice Insurance Outlook
We want to recognize that the social work profession is truly a noble one, founded on service, integrity, and clinical expertise. At times, it can be stressful and a very dangerous occupation. The nation is grateful for what you do, and so are we! Thank you!
Your professional liability insurance coverage is as necessary for your practice as food and water are to you. No insurance means no license. Additionally, an inadequate liability coverage limit will preclude you from certain health systems that require a minimum of $1 Million/$3 Million coverage.
It is important to understand where the insurance market is heading because it significantly impacts the profession. So here it is.
According to The Business Research Company (2025), medical professional liability insurance, also known as malpractice insurance, protects healthcare professionals against claims for negligence, errors, and omissions while providing medical services. This applies to behavioral health services and social work therapy as well. Their Global Report, as of 2025, indicates premium growth from $14.64 billion in 2024 to $16.23 billion in 2025, reflecting a 10.8% compound annual growth rate. This premium increase is driven by a combination of more accidents and incidents, rising medical costs, increasing legal defense hourly rates, nuclear verdicts, and a rise in telemedicine claims. By 2029, the forecasted premium will grow to $24.34 billion.
The Global Report neglected to consider two other important factors that impact premiums. One factor is the robust growth rate of social workers and behavioral health practitioners. Depending on the source, the annual growth rate in the behavioral health professions ranges from 4% to 7% as new people enter the industry. Literature from the U.S. Department of Labor indicates that the social work profession and related mental health professions are among the fastest-growing occupations in the U.S.
Another factor, which is a double-edged sword, is that premium hikes occur when insurance carriers, covering their claims losses and expenses, seek to maintain their profit margins. As carriers lower their policy sub-limits and coverage benefits, they add optional endorsements to replace the lost coverage and charge an endorsement premium. Therefore, premium annual growth is attributable to many factors, including typical market demand.
Pro-Tip
Before you switch insurance carriers or buy a professional liability insurance policy, verify the coverages. Policies are not identical. Many policies set sub-limits on legal defense. Some carriers include legal defense in their per-occurrence limit, while others, like Preferra, extend the legal defense expenses past the sub-limit and per-occurrence limit, up to the aggregate limit of the policy. For example, from $3 million to $5 million in aggregate coverage
In January 2024, the Association of Health Care Journalists reported that medical errors caused 251,000 fatalities annually in the U.S. Artificial Intelligence is increasingly being utilized in underwriting for real-time quoting and policy binding. This process sharpens predictability to control losses, which also helps carriers with straight-through processing. However, it tightens application acceptance, so expect more application denials and increased premiums arising from more thorough underwriting. Embedded in this process is the fact that tighter underwriting reduces risk by charging higher premiums for higher risk profiles upon application. In other words, higher risk means more premium is required, or the application will be rejected.
According to a December 27, 2024, article published in Transport Topics, states across the nation are enacting legislation to curb nuclear verdicts. Many of these lawsuits are frivolous and cost the average U.S. household over $4,000 per year in tort costs incurred by each state. Since 2016, the annual tort cost has grown at a rate of 7.1% and is projected to reach $900 billion by 2030.
Just so you know, the American Tort Reform Foundation, in its annual “Judicial Hellholes” report, rated the Top 10 worst states for lawsuit abuse, ranked as follows:
- Pennsylvania
- New York
- South Carolina
- Georgia
- California
- Illinois
- Missouri
- Michigan
- Washington
- Louisiana
Nuclear verdicts must go. This exploitation turns a system meant to compensate injured parties into a tool for personal gain, often at the expense of not just defendants but those it was designed to protect as well.
