By Matt Gracey of Danna-Gracey
This quote relates well to the present state of the medical-malpractice-insurance market. We are in a very “soft” market, meaning the premiums are low because the frequency of claims against doctors is at a historically low level in most areas. This in turn has created more competition, looser underwriting practices, and many more insurance companies offering doctors coverage.
Let’s substitute “financially solid” for “fast” since “fast” is not something we look for in malpractice insurance. Since “good” is a bit general for our purposes, let’s substitute it with “good claims defense,” which is really what you are seeking when you purchase a malpractice insurance policy. So here is our new quote:
“Financially solid insurer/good claims defense/cheap premiums: You can only have two. “
Here are your options:
Financially solid/good defense: Financially solid insurance companies that, in fact, provide a good defense do so at great expense because they hire the best attorneys and the best expert witnesses. They do not just settle frivolous cases to protect themselves, but instead look out for their insured doctors. Almost by definition these insurers can never be the cheapest since they are not cutting corners because they are charging adequate premiums to deliver a high quality defense as they make a fair return on their investment. The best option.
Financially solid/cheap premiums: Some solid insurance companies have a strategy to offer cheap premiums, most often by sacrificing the quality of their defense of claims against their doctors and settling many more cases than the insurers charging a bit more. These insurers offer cheap “teaser” rates to get your business, and then increase their rates as soon as the market cycle changes and you have fewer options. Avoiding this group takes courage, insight, and good advice. Unsustainable option.
Good defense/cheap premiums: Some insurance companies say that they will defend their doctors, but in the end you can bet if their premiums are too low they will either become financially fragile and unstable or end up raising their rates or sacrificing the quality of their defense of cases against their doctors. Be careful and ask lots of questions of these insurers. Unsustainable option.
All of the scenarios of the latter two options could harm you and your practice’s reputation, and ultimately cost you much more in the long run. Remember the saying that “cheap can get expensive very quickly.”
In this maze of malpractice insurance doctors and their administrators get very confused by the marketing hype of the multitude of brokers and insurance companies now offering coverage. Most find it very difficult to discern which insurance companies are in fact financially solid, which offer a good or great claims defense, which just roll over on their doctors by settling almost every lawsuit or threat of such, and which charge rates that are just teaser rates and completely unsustainable in even the short term. As pressure builds on doctors and administrators to cut their expenses as their incomes are decreasing, it becomes even more important to take the time to study the malpractice insurance marketplace or find an expert to help you through the maze.