Q: With a more difficult, “hard market” predicted to hit
Florida’s malpractice insurance market soon, what should we be
considering in our medical practice to be prepared?
A: Just like creating hurricane plans before the fury of a
storm descends upon you, now is a good time to be positioning your
practice for the impending hard market in malpractice insurance that
will be unfolding in the next few years, just at a time when many
practices are challenged by decreasing income and rising expenses. The
best strategy can be broken down as this:
1. Preventative: Focus yourself and your entire practice team on
risk management. Many times doctors overlook the importance of including
the staff in risk management discussions. Studies show that the
friendlier your whole practice environment is the lower your risk of a
lawsuit. Many higher end malpractice insurers offer risk management
assessments of your practice including in-office observations and
recommendations, all for free. Alternatively many offer self-assessment
tools. Take advantage of these free services!
2. Review your malpractice insurance coverage with an experienced
specialist to make sure you are on “high ground” when the storm unfolds.
Beware of the many offers from small, new, unrated insurance companies
now offering coverage in Florida. Ask your broker to shop your coverage
to a number of rated insurers and remember that in this market cycle
just before an upturn you will see many offers that are too good to
last. The few strong insurers have the ability to withstand the upcoming
market pressures because they are not highly leveraged, are not
offering actuarially unsound rates, and have a long term not short term
philosophy. Find those and you will be much better off when the high
winds are pounding on your practice windows!
3. Create negotiating power: Many medical societies, networks, and
hospitals have created malpractice insurance purchasing groups to give
even smaller practices the negotiating power of larger ones. If you
cannot find a suitable purchasing group then consider creating one with
your peers, now before the market changes. Such groups are fairly simple
to start, legal, and will help you weather the next cycle of sharply
increasing malpractice rates.
4. Make sure that your asset protection plans are up to date and if
you need to transfer assets around do so soon before many more claims
get filed against doctors after the much predicted upcoming overturn of
the 2003 caps on non-economic damages.
We at Danna-Gracey are here to help if you need specific direction
and recommendations on any of these suggestions and would be honored to
become part of your trusted team.