Archives for December, 2010

Corporation Entity Coverage Exposure

To Cover or Not to Cover?

Many physicians and surgeons practice under the protection of a corporation or entity and many don’t realize the importance of insuring that corporation or entity. In a lawsuit, plaintiff attorneys will, in their discovery process, find information on a doctors corporation. This could lead to a lawsuit naming that doctors corporation in addition to the doctor. Without having that corporation or entity listed on your policy as an additional named insured, there is no coverage in place to defend the corporation much less indemnify a loss.

As a rule, you should consider naming your corporation or entity as an additional named insured on your policy. Physicians can opt to have their corporation or entity share in their limits of liability, or have it’s own set of limits to protect from a medical malpractice claim against both the physician and the corporation. It is important to consult with a qualified attorney to set up the appropriate entity.

The Factors of Medical Malpractice Insurance Coverage

As a broker of medical malpractice insurance for physicians, we are often asked how the Medical Malpractice insurance carriers calculate the cost of a med mal policy. The truth is, every physician is individually underwritten and there are many factors that go into the equation. Following are a few of the most important factors that are always considered when pricing medical malpractice insurance:

  • Specialty - For example… the risk of insuring a surgeon is considered to be higher than it would be for a primary care physician. Typically, the higher the risk, the higher the premium.
  • Venue - Where is the physician practicing {city, state}? Medical Malpractice Insurance Premiums are very dependent on the local tort laws and legal environment. Generally speaking, physicians practicing in major metropolitan areas tend to pay more than those practicing in rural areas.
  • Claims - A physician with a claims history that includes payouts will almost always pay more for their medical malpractice insurance than a physician that is claims free.
  • Limits - Premium rates are dependent on the limit of liability. There are often requirements (from the state and/or a hospital) that will dictate what the limits need to be.
  • Coverage - Is the physician looking to cover prior acts? If so, it obviously costs more to include prior acts coverage back to a retroactive date than it would to insure the acts of a physician only going forward.
  • Policy - There are two types of policies that are most typical in the medical liability insurance world… Claims Made and Occurrence. Occurrence coverage is usually more costly. Doctors should make sure they understand what type of policy they have and what the differences are.

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Medical Liability Insurance Risk Management – Communication After An Adverse Outcome

Does the “Sorry Works” Legislation Work?

You probably have heard of “Sorry Works” legislation by now in reference to medical malpractice. It has been floating around legislative assemblies with some notoriety since 2005 in an effort to help reduce the cost of medical liability insurance for physicians. Also known as “apology laws,” the Sorry Works legislation has been introduced to salve relations between doctors and patients in the event of a perceived malpractice incident in hopes of hampering medical malpractice lawsuits bolstered by bad communication and anger after an adverse event.

In states that do not have “Sorry Works” legislation, if a medical incident happens that facilitates a potential malpractice claim, doctors are warned by legal counsel not to say “I am sorry.” This simple and heartfelt sign of sympathy can be misconstrued as an admission of guilt and is legally admissible in a malpractice proceeding. This legal sand-trap eventually gave way to varying degrees of justifiable self-preservative actions by doctors who were concerned that this legitimate sympathy could severely hamper their practice in the future due to a successful suit brought by a plaintiff. Consequently, as doctors would distance themselves from patients for legal protection, many patients who had suffered an adverse occurrence felt ignored or “kept in the dark” during a very unsettling time when they knew something, medically speaking, was amiss. This frustration and anger felt by the patient added “fuel to the fire” and served as additional motivation to lawyer up and bring a suit.

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