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The Changing World of Medical Malpractice Insurance

Medical Malpractice Insurance, often referred to as Professional Liability Insurance, is something that every healthcare professional must carry to be protected in our litigious society. Up until this summer, there was a cap in place limiting the amount of damages for pain and suffering that could be awarded in malpractice cases.

Let’s step back for a minute and define medical malpractice insurance before we get into the details of the cap ruling. Medical malpractice insurance is a type of professional liability insurance designed to protect physicians and licensed health care professionals from claims of wrongful practices. The policies cover bodily injury, property damage, and mental anguish.

According to the National Association of Insurance Commissioners (NAIC), there are two basic types of malpractice insurance – occurrence or claims-made. Occurrence claims were popular in the early days of malpractice insurance as they covered losses that occurred during the term of the policy regardless of when the claim was made. Claims could even be made after a policy had been cancelled as long as the incident occurred during the term of the claim. Claims-made insurance policies are the opposite. They are claims made in response to an incident that are reported when the incident occurred and valid only while the policy is in effect.

Back to the cap issue. Recently the Florida Supreme Court ( ruled that the cap law was unconstitutional and rejected the law originally approved in 2003 by then Florida Governor Jeb Bush. Back in 2003, Governor Bush and lawmakers spent many months debating the crisis of high medical malpractice premiums. The good news is that their labors resulted in the lowering of premiums and the increase of insurance availability, both of which essentially stabilized the industry.

This past June, the University of South Florida’s news channel WUSF reported that the law was originally put in place to cap damages at various amounts dependent upon factors such as the number of claimants in lawsuits and the types of defendants. The ruling was prompted by a Broward County case and dealt mainly with malpractice lawsuits alleging personal injuries.

The case made it evident that the times have changed since 2003. In 2014 the Supreme Court ruling found caps to be unconstitutional in wrongful death suits. This new 2017 ruling is an extension of that original 2014 ruling. This is a huge change for litigation in Florida who ranks in the top percentage of medical malpractice markets in the country.

There is both good and bad news about the ruling. The good news is for injured parties who have suffered drastic injuries and can now be compensated for their injuries without caps. The bad news is that with damage caps considered unconstitutional, there may be an increase in the amount of malpractice cases. But, there’s good news in that also. It’s called the burden of proof. Malpractice cases are not automatically awarded to the injured. There has to be proof of wrongdoing.

Bottom line is that it is always wise to have the best insurance protection possible. For healthcare professionals, malpractice insurance is a “must”.

This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.  Should you have any questions or would like to discuss your risk exposure with your practice’s malpractice insurance, please contact the insurance pros at ARCW Insurance.  We are here to help.