South Florida Hospital News
Monday May 25, 2020
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April 2010 - Volume 6 - Issue 10

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Malpractice Insurance Expert Advice from Danna Gracey

Q: When choosing a malpractice insurance company, how can I tell which one is going to vigorously defend me?

A: Defending claims is really where "the rubber meets the road" in malpractice insurance! Doctors and their administrators often get hung up in looking just at premium quotes, marketing slogans, brokersí service or personalities, or insurance-policy provisions that they might or might not like. The real reason one purchases malpractice insurance is to be assured of a strong and affordable defense if a lawsuit is threatened or filed against your practice. Unfortunately, figuring out each insurerís true claims-defense track record has been tricky at best. The good news is that in recent years, the Florida Office of Insurance Regulation (OIR) has been gathering more and more data on claims defense and now has enough data to make for a credible examination and analysis.

In looking at claims-defense records, the most useful measurement index is the one gathered on the percentage of cases each insurer has closed without any indemnity payment to the plaintiffs. A higher percentage indicates a stronger claims-defense philosophy. The industry average in 2008 was just under 50% of filed cases closed without any payment to the plaintiff. One popular insurerís numbers have fallen rather dramatically, from 90% of their cases closed with no indemnity payment to only 37% of them in the three-year span from 2006 through 2008, despite their marketing folks talking about their strong defense. This example demonstrates why doctors and their administrators need to "look behind the curtain" at the independent OIR data to analyze what kind of claims-defense they are really buying.

A few notes are important, though. Some insurersí marketing will show the percentage of their cases closed with no indemnity payment. However, some of that marketing will skew that percentage by including closed "incident reports" as well as actual cases filed, to make their defense data look better. Also, some newer or less-popular insurers have so few closed claims that their percentage closed is almost meaningless. The top insurer in Florida, FPIC, handles so many cases against their large number of Florida insureds that trying to compare their above-average percentage with another insurer handling a fraction of their numbers can be a bit distorting. Experience does count in Florida courtrooms though, and you can see from the OIR reports how many more cases an insurer like FPIC handles than their counterparts. The OIR data also show the average defense costs spent by each insurer, which is another indication of an insurerís defense philosophy.

If you would like a copy of the most recent OIR report or to discuss your particular insurerís record, do not hesitate to contact us. We are independent malpractice insurance experts and will help you through this maze and look out for you.

Matt Gracey, Malpractice Insurance Expert, Danna-Gracey, can be reached at matt@dannagracey.com or (800) 966-2120.
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