Tort Reform, Claims Frequency

The Medical Liability Market still is soft, by most calculations and, there are factors popping up that will likely contribute to a rise in frequency in the coming months.  In an effort to position for growth when rates increase seemingly inevitably in the future months, some companies are lowering rates.  Additionally, there is renewed emphasis on e health record, Billing Errors & Omissions and ancillary provider liability insurance.  

The combined action of hospitals purchasing physician practices, Pressure to peel away tort reforms and the increase of patients access due to Health Care Reforms are ushering in increases in claims.  Concurrent with an increase in the number of law suits, it is well documented that the average claim amount has increased by 5% each year.  And, rates continue to decline, year after year, net reductions approaching 30% from almost a decade ago.  The concern in the malpractice insurance industry is that very suddenly, there could be lower reserves stabilizing the Carriers, fewer protections in the Courts against large Settlements, increased claim rewards, more patients to protect and Judicial Discrepancy to raise the amount of jury awards if they feel they are too low given the injuries in question.  

As Carriers are already insuring physicians for Incurred but Not Reported losses, if State's Supreme Courts raise the limits of tort protections, plaintiffs will receive more, gradually and further eroding the adjusted reserves of the Medical Liability Carriers.  

All of this means, it is important to place your malpractice insurance with a carrier with strong reserves.  Additionally, it is probably not realistic to expect the rates for physician liability to continue to drop.  The Doctors Insurance Agency has Nine Licensed Agents ready to assist and advocate for realistic and sustainable professional liability coverage.  

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