Illinois Medical Malpractice Insurance Market Summary
Medical malpractice insurance claims in Illinois historically have followed a cyclical pattern, which is true in most states and nationally as well. Typically when the economy takes a downward turn the number of medical malpractice claims increases along with the severity of settlements and awards. Because the malpractice claims have been cyclical it follows that the medical malpractice insurance market and rates are also cyclical and directly related. In Illinois we have seen years where malpractice claims were so frequent and payments were so severe that insurance companies were losing money. Naturally that created a climate where insurance companies no longer wanted to insure doctors in the state, and the ones that would raised their rates to compensate for the amount of money they were paying out for claims. This is what’s referred to as a “Hard Market” – premiums are high, claims are up, there are only a few medical malpractice insurance companies available and physicians have a hard time finding coverage.
The Hard Market creates challenges for healthcare providers. When there are only a few companies offering coverage they tend to make underwriting guidelines more stringent. Not too long ago, an Illinois physician with one claim would be denied coverage in the standard insurance market forcing him to find coverage elsewhere at exorbitant prices. Physicians with claims in Cook, Madison, McHenry, St. Clair, and Will Counties often couldn’t find coverage at all. During these severe Hard Markets, the cost of malpractice insurance in some areas in Illinois caused physicians to move locations, sometimes going across the state line (into Missouri and Indiana) to practice, to stop doing higher risk procedures, and even to close up shop and stop practicing medicine permanently.