BY VANESSA ORR
As premiums continue to increase for professional liability coverage, a number of physicians are choosing to self-insure, or “go bare.” And while Florida law does not require physicians to have professional liability insurance, the risks far outweigh the rewards.

“Self-insuring is analogous to having a home that, because you paid the mortgage off, doesn’t require you to carry insurance,” said Bill Gompers, CFE, producer, Danna-Gracey | Risk Strategies Company. “While you may think you’re saving money, if something happens to the house, you’re paying for it.”

Physicians in Florida without liability coverage are only required to post that information in their offices and sign an affidavit promising to pay the first $100,000 of a settlement or a judgement if they do not have hospital privileges, or $250,000 if they do.

“Many people say that attorneys will not go after physicians who do not have insurance because it takes a lot of money to develop a liability case, and it’s not worth doing unless it’s a significant case,” said Gompers, adding that laws in Florida that protect assets often do so in favor of physicians. “They have to put out a lot of money with the risk of little return.

“There are studies that show that physicians without insurance don’t get sued as much, and other studies that show that they do, especially if the lawyers have a significant case. Without addressing the pros and cons of this, the most recent statistics show that more than 65 percent of physicians over age 55 have been sued.”

While the vast majority of these suits are not successful, it still costs physicians time and money to put up a defense. “It can be a lifechanger,” said Gompers. “That’s why it’s important to be insured by a company that has your best interests in mind and can provide competent counsel that shares your same priorities and objectives.”

Although Florida doesn’t require professional liability insurance, some insurance plans and programs do require physicians to have this coverage, as do many hospitals, surgical centers and imaging centers.

Bare doctors may also find that they have trouble recruiting new young doctors into a practice unless that practice is covered.

“Physicians can still be held liable for judgements against them, even though they feel they are protected by working within a larger system,” said Gompers. “And in some institutions where the employees are fully covered, an independent physician may find that they get thrown under the bus if no one is representing their interests; the other physicians or health system may gang up against them, blaming the independent
physician and forcing their insurer to go after that plaintiff more heavily.”

He adds that many doctors think erroneously that they will be dropped from lawsuits once the plaintiff finds out they are bare. ”More common is that the plaintiff’s attorneys “persuade” the bare doctors to testify against their co-defendants in return for favorable treatment,” he said. “In contrast, when all of the co-defendants are insured with the same carrier, there is a strong unity of defense that wins many cases.”

He notes that the average cost of defending a case that doesn’t go to trial is between $25,000-$50,000; if it goes trial, it can cost $100,000-$250,000.

“If you ultimately lose, in order to keep your license you’ll end up writing a check for a minimum of $250,000,” said Gompers. “And if you don’t pay it within 60 days after exhausting all appeals, the board will suspend it.”

In addition to HIPAA protection and some cyber protection, Gompers notes that the most important benefit of professional liability insurance is that it includes license defense. “In Florida, when a professional liability claim is filed, it is incumbent on the plaintiff and the plaintiff’s attorney to advise the state, who will invariably open up a Department of Health investigation looking at that physician,” he said.

“While many asset protection attorneys tell their clients that they have successfully put together a plan that bulletproofs their assets against judgements, unless they’re willing to give you an affidavit in writing that should it be breached they’ll pay it for you, you need professional liability coverage,” he added. “The fact is, things that they think might be bulletproof maybe aren’t, and that’s not something you want to learn while a court of law sorts it out.”