South Florida Hospital News
Saturday October 31, 2020
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June 2010 - Volume 6 - Issue 12
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http://dannagracey.com/

Malpractice Insurance Expert Advice

Q: What limits of liability for malpractice do you recommend for doctors in Florida?

A: This is probably the toughest question any expert in medical malpractice insurance is asked. Unfortunately, no easy answer exists that are appropriate for every doctor, but after considering all of the factors you will certainly be in a better position to make an educated decision on this important issue.
 
The first consideration these days usually deal with costs and if you can afford anything other than the lowest limits, which are generally $250,000 / $750,000. Next determine if you have any contractual obligations with your managed care companies, hospitals, or within your group to satisfy that might limit your choices of liability limits.
 
Other considerations include how many “bare” and under-insured doctors do you practice close to or with whom you exchange patient referrals. In a large, multi defendant lawsuit you certainly do not want to be the “deep pocket” if you are carrying very high limits and the others all have low limits or are uninsured.
 
If you are retiring soon you may want to consider raising your limits the last year of your practice so that you can obtain a higher limits tail when you retire since a “tail” policy is just an extension of your last policy and the limits cannot be “recharged” yearly as normal annual policies. The “tail” of your policy will extend your policy with one liability limit covering the rest of the exposure window, which in Florida typically is four years or a child’s eighth birthday.
 
How much risk do you want to take?
The average claim in Florida settles for around $300,000. However, the average is weighted sharply downward by the high percentage of nuisance cases settling for very minor sums. A serious case that goes to trial and is lost has an average exposure of over a $1,000,000, so practicing with $250,000 limits is certainly risky on one hand.
 
On the other hand, many believe that by purchasing higher limits of liability doctors become targets of the plaintiff attorneys and expose themselves to worse claims than by carrying lower limits. In Florida the “bad faith” laws often pass any danger of excess limits judgments to a doctor’s insurer, so some doctors believe that they can be comfortable by just purchasing the lowest limits.
 
One serious consideration against carrying low limits is this: if you practice with low limits of liability the insurance company claims managers say that they are much more likely to settle a case quickly because they do not want to expose the doctor or the insurance company to a possible multi-million dollar verdict against either of them. However, the newest twist to that thinking because of the passage of Amendment 8 is that maybe doctors would now rather have the insurance company eager to settle their case to avoid a “strike” on their claims record.
 
Conclusion
Even after considering all of these factors, the answer to which limits of liability you should carry is very personal as there is no “correct” answer. Much depends upon your fundamental belief in using insurance to mitigate your practice’s risk, and some depends on how well you can sleep at night with little or no insurance coverage.
Matt Gracey, Jr. is a medical malpractice insurance specialist agent with the firm of Danna-Gracey in downtown Delray Beach. To contact him call (561) 276-3553 or (800) 966-2120, or e-mail matt@dannagracey.com.
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