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Malpractice Insurance

EXPERT ADVICE

Hardening Malpractice Market Means Physicians

Will See Higher Rates, Fewer Discounts

BY VANESSA ORR combined ratios over physician carrier, who raised rates on they are practicing without professional
100. specialty practices by 80-90 percent. liability insurance, this has the effect of
For the last 13 years, the “In the malpractice “Physicians who were paying a $10,000 passing along higher premiums to physi-
Florida malpractice insur- world, the ‘combined premium were now paying $18,000 in cians who purchase insurance.”
ance industry has remained ratio’ is the litmus test the space of one year,” he said. Murphy recommends that physicians
relatively soft, which is good for how carriers are The smart carriers did learn that les- still insure with a strong financial mal-
news for physicians and doing,” explained Mur - son, and have socked away profits in practice company that will stand behind
medical practices. Unfor - phy. “If they’re running reserves over the intervening years so its physicians.
tunately, the days of lower anything under 100, the that they don’t need to raise rates quite so “Some people will look for the cheap-
premiums, discounts and companies are in the dramatically. est carrier, but this is probably the most
credits are slowly disappear- black and making a prof- “Most of the good, financially strong important insurance you can buy,” he
ing. it. physician carriers, which are the ones we said. “A smaller, undercapitalized com-
“We haven’t seen a hard- “For the past few work with, are raising rates—3 percent pany will settle a claim and pay a smaller
ening market since 2002- Tom Murphy years, a number of what last year, 5 percent this year,” said amount versus defending a client for as
07, and back then, it was we call ‘shock losses’ Murphy. “However, some companies are long as it takes—and in the end, what’s
really bad,” explained Medical have occurred, with judgements in having to institute larger rate increases of more important than your reputation?”
Malpractice and Workers Compensation excess of $10 million dollars,” he contin- 10-15 percent as a result of poor under-
Specialist Tom Murphy at Danna-Gracey. ued. “That hastens a hardening market.” writing performance and massive shock For more information, contact Tom
“There were roughly 50 malpractice car- According to Murphy, all major carri- loss claims. One major physician carrier Murphy or Matt Gracey at 800-966-2120
riers offering coverage to doctors at that ers are now running combined ratios in just experienced a $35 million judge- or visit www.dannagracey.com.
time, which dwindled down to four or excess of 100, which will trickle down to ment.”
five. Companies either closed or got affect premiums. “This will also change The good news, at least in the longer
bought up by larger carriers.” underwriting guidelines, with companies term, is that the Florida Supreme Court
Despite the fact that voters approved no longer giving credits or discounts has changed over the past three years, so
tort reform in 2004 that included a cap while slowly raising rates,” he said. “The the current court might support tort
on non-economic damages, in 2016, that difference between this hardening mar- reform if the issue can be reintroduced.
decision was reversed by the Florida ket and the 2002 market is that the last In the meantime, physicians need to
Supreme Court. That, and the fact that one happened suddenly and painfully. carefully consider their options.
claims and lawsuits have increased over Carriers waited too long to raise rates, “When premiums go up and become
the last two to three years, has taken a waiting to see who would jump first.” unaffordable, some physicians ‘go bare’
toll on carriers who are now running Murphy gives the example of a large or self-insure,” said Murphy. “Because

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6 March 2020 southfloridahospitalnews.com South Florida Hospital News