Bad Advice on Medical Malpractice Insurance Coverage

I just read a press release that crossed my desk, and it gives really bad advice in regard to medical malpractice insurance coverage. This press release recommends that physicians choose to carry the minimum amount of medical malpractice insurance coverage necessary because this will make the doctor a less attractive target for a lawsuit.

The press release surmises that when a physician has adequate medical malpractice insurance coverage, he or she will appear to trial attorneys as having “deep pockets” and be more “likely to attract lawsuits rather than deter them.” Carrying the least amount of insurance necessary, or even going bare, the press release purports will “deter frivolous lawsuits since attorneys will see there is nothing there—so they won’t waste their time; or anyone else’s.”

Yeah, right. When has a trial lawyer shied away from wasting anyone’s time?

This press release is selling a service the author wants physicians to pay him to perform. The company is a wealth management firm that specializes in structuring assets so that they would be more difficult for a trial lawyer to access in a judgment. An example of this would be to put all assets in the name of the physician’s spouse.

There are a number of reasons that not carrying adequate medical malpractice insurance coverage is a bad idea. Following are a few of those reasons:

• Medicine is your career. Do you really want to take risks with your professional and financial future?

• Adequate medical malpractice insurance coverage will cover the costs of your legal defense should a claim arise. Medical malpractice lawsuits, even those that the physician wins, are very expensive to defend. If you don’t have adequate medical malpractice insurance coverage, you’ll be paying out of your pocket.

• There is no evidence or data supporting the theory that carrying the minimum amount of medical malpractice insurance coverage reduces the likelihood of being sued. And we have never met a medical malpractice defense attorney who agrees this theory.

• Plaintiff’s attorneys almost always will name every physician who may be even remotely liable in a claim, regardless of insurance coverage. This is just the way the system works. Is it fair? No, but it’s true.

• Because of the claims-made nature of medical professional liability insurance, once you forego medical malpractice insurance coverage, it can difficult to find an insurer willing to write your policy.

• You are trusting someone else to protect your assets. If the advice you received turns out to be not appropriate, your assets are in jeopardy. Bankruptcy could be the only recourse.

• I’m certain the attorneys recommending an asset protection plan in lieu of adequate medical malpractice insurance coverage are themselves carrying professional liability insurance.

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