Medical Protective

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Medical Protective, known informally as MedPro, is one of the largest medical malpractice insurers in the U.S., insuring more than 80,000 doctors and other healthcare professionals; writing more than $700 million in annual premiums. The company’s roots go back to 1899, when the Physicians’ Guarantee Company was formed by a group of doctors, covering legal defense costs but not indemnity. Medical Protective, formed in 1907, acquired the Physicians’ Guarantee Company in 1913 and began covering indemnity. MedPro was privately owned through 1998, when it was purchased by General Electric. Warren Buffett’s company, Berkshire Hathaway, bought Medical Protective from GE in 2005 for $825 million. The company is headquartered in Fort Wayne, Ind.

Medical Protective is highly rated by independent agencies for its financial strength, achieving the highest possible ratings from both A.M. Best (A++ or Superior) and Standard & Poor’s (AAA or Extremely Strong). These ratings reflect a healthy market position, conservative viewpoint and robust reserves. When selecting a malpractice insurer, physicians should consider the financial rating of the company. Selecting a highly rated company can mean a somewhat higher premium, but going with a low-rated or unrated carrier can lead to problems down the road if the carrier becomes insolvent or experiences other financial problems. This can sometimes lead to a gap in coverage, which can make it hard to obtain insurance in the future. MedPro’s 2005 sale to Berkshire Hathaway reenergized Medical Protective and allowed it to reenter markets in which it had long been inactive.

MedPro offers policies on both a claims-made and occurrence basis. An occurrence policy covers any incident that occurs during the effective period of the policy, regardless of when the claim is filed. A claims-made policy differs in that coverage must be in effect when a claim is made, even if the claim is filed years after the incident in question. This means that physicians must maintain constant coverage under a claims-made policy. Even after retiring, it is necessary to extend coverage with an insurance mechanism called a tail. A tail can be purchased from the medical malpractice insurance company to cover a vacation or retirement once the policy is over. Medical Protective offers free tail to clients who have a mature, claims-made policy and are permanently retiring from medical practice.

Many malpractice insurers offer risk management services to their clients, since insurers have an interest in reducing claims in every way possible. MedPro offers a personal risk consultant for its clients, as well as other risk management services including CME programs that focus on risk reduction, live seminars, online tools for assessing practice risk and the potential for premium discounts based on risk management. These discounts vary based on the physician’s specialty and other specifics, but, as an example, pediatricians and emergency physicians can complete a set of CME courses that will earn a 5-percent premium discount good for three years.

Another factor to be considered in malpractice insurance is consent to settle. Some states require insurance companies to obtain a physician’s consent before settling a lawsuit with a claimant, but some do not. This can lead to insurance companies paying a settlement for a claim in which a physician feels he is not liable and could win a case, preserving a clean record. Medical Protective offers a full consent to settle clause to its clients, and does not include a “hammer clause.” A hammer clause exists in a policy to compel physicians to settle claims. A typical hammer clause might state that if there is a settlement offer for a claim and a physician withholds his consent to settle, the insurance company will reimburse only the amount of the settlement offer plus the legal fees incurred up to the time of the settlement offer. If the judgment in the trial is larger than this sum, the physician is personally responsible for the difference. Many physicians feel more comfortable with a policy that does not have a hammer clause.

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This write-up for Medical Protective was put together by Michael Matray, the Editor of the Medical Liability Monitor