www.insurance4docs.com

Let me introduce myself . . . my name is Bruce Swicker, and I am an independent insurance agent and broker, with offices located in New York City and Nassau County (Long Island).

It’s the year 2003, and the medical professional liability ("malpractice") insurance marketplace is undergoing a period of tremendous - and often unpleasant - change.

Due in large part to pricing pressure brought on by intense competition and excess capacity over the past several years, some carriers are finding themselves faced with mounting losses. Probably more so than in any other line of insurance, except maybe environmental exposures, medical malpractice has a long, volatile, and often extremely expensive "tail" exposure.

For instance, a child born today may, under certain circumstances, have a viable cause of action against the attending physician and the hospital a full TWO DECADES down the road! Why? The child’s rights will often survive through the age of majority – 18 in most states.

Some well-known - and respected – medical malpractice insurers have been forced to strengthen their reserves; sometimes to the tune of hundreds of millions of dollars. This has, in turn, caused the independent financial rating services such as A.M. Best Co., Standard & Poors, Duff & Phelps, etc. to look very hard at their numbers. In several instances, insurers have suffered significant rating downgrades, or in the case of a few well-known carriers such as Frontier and PHICO, regulators have stepped in and placed them in rehabilitation or even liquidation! 

Some carriers have been forced to sharply curtail their writing, while some are non-renewing all but the most desirable risks, leaving doctors who have previously assumed that insurance would never be a problem, faced with the need to replace their coverage after years and years of paying premiums.  In fact, a major national carrier, St. Paul, has recently announced that they are withdrawing from the medical professional market entirely.  It is my understanding that St. Paul accounted for approximately 10% of the medical professional insurance capacity, nationwide, so their withdrawal is forcing a HUGE number of professionals and facilities to replace their coverage, using one of the remaining carriers. 

A number of malpractice insurers are putting themselves up for sale – indeed, some are probably in such poor financial shape that no buyers will materialize, raising the very real possibility of a state-appointed conservator or liquidator. In fact, several well-known carriers - most notably Frontier & PHICO - have been placed under the supervision of regulators.  While it is unlikely that doctors will suddenly find themselves unprotected, they might very well find that their state insurance department is now in charge of the defense of their claims, rather than the claims managers that they have come to know and trust over the years. 

Far from a bleak picture, however, the medical professional liability insurance marketplace is reinventing itself. Insurers are merging, demutualizing, obtaining multi-state licenses in order to provide one-stop service to larger regional medical provider networks. Some larger facilities are now self-insuring a portion of their risk, or are setting up "captive" insurers to gain greater control over the decisions being made with regard to their coverage.

One innovative carrier has set up an off-shore reinsurance trust, which allows their policyholders an opportunity to participate as investors in the overall underwriting results, while still maintaining the protection of a highly rated primary or "fronting" carrier on each individual policy.

Another recent development is that more and more insurers are less and less willing to continue providing coverage in their "standard" markets to those policyholders with even relatively minor claims histories, or out-of-the-norm practices. A more detailed discussion of the issue of "non-standard" or "impaired risk" underwriting can be found by clicking here which will take you to the section of my website dealing with this type of coverage.

In general terms, medical professional liability is written on either an occurrence or a claims-made basis, though the trend is increasingly towards occurrence form policies. Coverage is usually available for "prior acts" if the current policy is a claims-made form. Limits of liability are customarily written at $1 Million per occurrence, with a $3 Million policy aggregate, though other options are often available.

Coverage is available as individual or group policies, including coverage for the entity, such as the professional corporation or the healthcare facility.

Claims’ handling varies from carrier to carrier. Some policies include a "consent to settle" clause, while others give the insurer to sole right to determine when to settle. Some policies also include a clause requiring the policyholder to consent to a "common defense" with any other defendant insured by the same company. While this has certain advantages, it also has certain risks, and the acceptance of any such clause should be given very careful consideration.

Obviously, the subject of medical professional liability insurance coverage is tremendously complex – which is one of the reasons I enjoy it! I could probably keep writing for another two hours, and still leave issues unanswered.

I would be happy to discuss your particular situation in greater detail. Please select the appropriate page to the left, for additional information regarding your specific area of medicine or healthcare.  Otherwise, give me a call at 877-320-4061. This number is available 24-hours a day, and it will automatically try to find me, and will connect you to me if I am available. If I cannot take your call, you will have an opportunity to leave a private voicemail message, and will get back to you promptly. Of course, I can always be reached via e-mail at, insurance@insurance4docs.com.

Thank you for taking the time to visit my website, and I do look forward to speaking with you soon.

Bruce R. Swicker