A famous (or infamous) Johns Hopkins study in 2016 estimated medical malpractice to be the third-leading cause of death in the U.S., behind cancer and heart disease. Some in the medical community took issue with that conclusion, saying the numbers were inflated and pointing to a later study out of the University of Washington that suggested actual deaths resulting from malpractice are far lower.
Wherever the truth lies on those figures, there is one thing that is virtually certain when it comes to medical malpractice: Insurance premiums are high, and although they’ve been somewhat steady over the past decade, they’re about to get higher.
That’s according to an analysis earlier this year from the American Medical Association, which noted “an exceptional surge in the percentage of premiums with a year-to-year increase”—31.1% in 2020, to be exact.
Why rates are increasing
Why would rates go up now? There are a number of reasons. First of all, people are going back to the doctor now after putting off visits, in some cases for over a year. That means more surgeries and other procedures, which can drive claims. Also, telemedicine is becoming more widely adopted; in theory, this allows medical professionals to see more patients, which can increase liability risk. There’s an inflation factor, too—defense costs continue to rise, and so do claims payouts. One 2020 analysis found that since 2009, the average cost of a claim in the U.S. has jumped 50%.
This has led to a hard market in the segment, with industry losses among insurers and the negative outlook leading to higher pricing, more stringent underwriting, or both.
And the variance in rates can be staggering based on geography: For example, the AMA noted that base premiums for OB/GYNs range from about $50,000 in Los Angeles County to over $200,000 in the Miami area.
What you can do
To avoid a malpractice claim, it’s not enough to simply do your job well: 75% of physicians in low-risk specialties are likely to face one by the time they turn 65, and 99% of those in high-risk specialties probably will, according to the New England Journal of Medicine. That means your best offense is a good defense—making sure you have the right insurance coverage.
The most effective way to do that is by working with an experienced consultant like the professionals at Wilson Albers. But no matter who you work with, here are three questions you should ask before signing up for any coverage.
- What are the unique needs of my practice? Your policy should be designed around your specific needs, including your specialties, whether you need shared or separate limits for allied providers and your corporation, and other factors. You also want to consider the amount of your coverage limits—for instance, it might sound like the right move to have the highest possible limits, but if they’re far higher than other practitioners in your area, you could be targeted as the “deep pockets” in a suit involving multiple defendants.
- Am I getting the best price? It’s important to keep in mind that the best price doesn’t always mean the least-expensive price. You want to compare apples to apples when looking at different carriers, and working with a professional will ensure you’re getting quotes for comparable coverages. They’ll also be able to make sure you are receiving all the discounts for which you’re eligible.
- Do I know what I don’t know? Shopping for any insurance can be complex, whether it’s for your car, your home, or something as important as your business. Do you know if your current malpractice policy covers you for telemedicine if you’re working with a client out of state? What is your exposure for cyber liability, and do you even have coverage for it? If you aren’t confident in questions like how your loss history impacts premiums, whether you’re better off with a claims-made or occurrence policy (or a combination of both), and what your coverage gaps are, it’s a good idea to call a professional consultant.
At Wilson Albers, we’ll work with you to craft a coverage plan tailored to your unique needs. We’ll answer all of your questions, as well as a few you probably didn’t even realize you had. And we’ll find the best protection at the right price. Then you can focus on what matters most—serving your patients and growing your practice.