by Kelly Reed

Emerging Risk #1 – Severity of Medical Professional Liability Claims


What do the following numbers and states have in common?

  • $120,000,000 – New York
  • $78,500,000 – Pennsylvania
  • $74,000,000 – California
  • $10,000,000 – Ohio
  • $178,000,000 – Florida
  • $144,000,000 – Michigan
  • $58,600,000 – Connecticut

These were large medical malpractice jury verdicts in the past 20 months.

What does the term Emerging Risk mean? “A risk that has increased in frequency | severity or a risk that has presented itself for the first time – i.e. it didn’t previously exist.”

The severity or likelihood of a large Medical Malpractice or Medical Professional Liability claim has increased in recent years. This is why we classify it as an emerging hazard risk to a healthcare provider.

You may ask who can afford to pay these amounts as no one would buy that much insurance. Are these sums of money ever paid out? Just because a jury awards a verdict it does not mean all of those dollars are paid out. When a trial ends, it triggers the next phase of negotiations. These large verdicts are often reduced due to one or many factors. Some include:

  • State specific tort reform – ex: non-economic caps
  • Review by the judge
  • Negotiation between plaintiff and defendant
  • Defendant appeal to a different court

The Medical Malpractice market has been fairly soft in recent years either resulting in flat or decreasing premiums and often additional coverage offerings. What does all of this mean to you as a physician, healthcare provider, or hospital? With the frequency of claims being down, one strategy would be to consider taking a deductible on your policy and purchasing higher limits with the savings? Another would be to consider purchasing the supplemental coverage’s such as: Cyber Liability, Regulatory Defense coverage, etc… Lastly, another option would be to purchase “separate” limits of liability for your corporation.

Physicians typically go through a significant change in wealth from high debt (thank you medical school) to a place of wealth as your career matures. As your wealth grows it is important to protect what you have built over time.

To learn more about emerging risks and the effects they could have on you and your business, contact Kelly Reed  |  906.315.7227  |  kellyr@vastsolution.com.

The healthcare open enrollment period for 2022 individual and family health plans starts November 1 and runs through January 15.

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