Do Higher Medical Malpractice Insurance Limits Increase the Cost of an Indefensible Claim?
In this episode, Healthcare Matters interviews ALL MD attorney John Degnan on whether or not higher medical malpractice insurance policy limits increase the dollar value of settlements in cases of an indefensible claim.
Degnan is a shareholder at BRIGGS & MORGAN. He practices law in Minnesota, representing clients in business disputes, as well as members of the legal and medical communities in professional matters.
Degnan is a charter member of the Association of Liability Lawyers in Medical Defense (ALL MD), a nationwide organization that connects healthcare providers with attorneys who specialize in medical malpractice defense.
Interview was recorded October 14, 2015
Question 2 of 5
Mike Matray: Welcome to Healthcare Matters, where the medical and legal communities come together to discuss healthcare matters. I’m your host Mike Matray and today’s guest is John Degnan. He’s a shareholder at Briggs and Morgan in Minneapolis, where he regularly represents clients in business disputes as well as members of the legal and medical communities in professional matters.
John Degnan: Thank you. Glad to be here again.
Mike: Okay. In your professional experience, do higher limits on a physician’s medical professional liability insurance policy increase the dollar value in the case of settlements when you have an indefensible claim? In other words, can your physician or entity be over-insured, and conversely, can a case be made that the lower the limit, the lower the risk exposure?
John: Actually it may seem counter-intuitive, but I’ve found in my experience that the lower the limits sometimes the more expensive it is to try to settle a case. When you have high limits, you always base the valuation of the case on what you think in terms of liability but also potential damages.
On the other hand, when you have a low limits case, let’s say you have a $2 million policy, and there’s a potential for a loss in excess of that, let’s say 3 or 4 million dollars, plaintiff’s counsel will typically come in and say, “Okay, we’ll settle for the limits and I’ll give you a specific period of time. If you don’t settle within that time then all bets are off.” If there’s an adverse verdict and it should’ve been settled then the insurer essentially has a limitless policy. What that causes is most times the carriers will be almost compelled in a bad case to settle wherein they may have defended the case successfully, but for the limits problem. I’ve been personal counsel for a number of practitioners as well trying to urge settlement in such situations. So actually the more insurance, the better. I don’t think that that increases the value of the claim or the settlement.