What to Do when Non-renewed for Medical Malpractice (Professional Liability) Insurance
In the previous section, we discussed first steps to take, and how to attempt to resolve the problem with your current medical malpractice carrier. In this segment, we discuss Step 3 and Step 4, finding other coverage, and examining that coverage to be sure it’s right for you.
Step 3: BEGIN THE PROCESS OF SECURING REPLACEMENT COVERAGE OPTIONS. There is no need to panic. Coverage is available. It’s simply a matter of finding it and paying for it (more on paying for it below). To find coverage, your broker will compile an application and all supporting documentation to submit to a variety of insurance carriers. A good medical malpractice insurance broker can give you many insurance options in varying price ranges. Often physicians going through a non-renewal panic and start calling and applying to companies through any agent and broker they can find. This actually hinders your chances to obtain alternate coverage. There are only 5-15 companies (depending on your circumstances) available and same company will receive applications from more than one broker representing a panicked physician. If there is ANY conflicting information between the two applications it gives the appearance the physician is hiding material facts and can lead to the underwriter declining the application for coverage. So, take it easy, breathe, relax and let your broker handle the problem for you.
What you DON’T want to do is to go from the frying pan into the fire. Alternate options from risk retention groups or newly formed companies are usually a very bad idea. Historically, alternative risk or new medical malpractice insurance companies have a failure rate exceeding 85%! Don’t be tempted by the cheap medical malpractice premiums offered by unscrupulous or simply naïve agents offering “coverage” from one of these fly-by-night companies. At a very minimum you should check with the Department of Insurance and AM Best to get information about the insurance company. As the adage suggests, if it sounds too good to be true, it probably is.
Step 4: CONSIDER ALL YOUR INSURANCE OPTIONS CAREFULLY. Once your broker has completed the search for your replacement coverage, review all your options carefully. Discuss the differences between the expiring coverage and replacement coverage options at your disposal. Is there a deductible? A coverage exclusion? Retirement tail?