Background Medical malpractice and the problem associated with it remain an important issue in the medical community, yet relatively little is known regarding the nature of the fear of medical malpractice disputes of physicians. Aim This study aims to investigate the nature of hospital-employed physicians’ fear of medical malpractice disputes in Taiwan. Methods In-depth interviews were conducted to explore physicians’ personal experiences and observations of medical malpractice disputes. Thirty hospital-employed physicians varying in age, subspecialties, gender, institution, length of time in practice, and affiliation participated in this study. Results Physicians’ fear of medical malpractice disputes could be classified into two major categories, namely perceived negative consequences and perceived risk factors. Perceived negative consequences consist of (1) litigation (2) adversarial confrontation (3) reputation damage (4) psychological stress. Perceived risk factors consist of (1) medical uncertainty (2) work overload (3) influence of the National Health Insurance (4) weakened physician-patient relationship. Conclusion Physicians’ fear of medical malpractice disputes is not just about litigation but about other aspects. To reduce physicians’ fear, tort reforms are not sufficient, instead, other strategies such as adequate protection and psychological support of physicians are needed if a medical malpractice dispute has taken place. Physicians’ workloads and quality of medical care delivered should be ensured under the Budget Planning of National Health Insurance, as well as restoring a collaborative physician-patient relationship.