Most physicians in the US carry $1M in professional liability coverage. That works for most situations.
Does that mean a patient, now a plaintiff, will not attempt to sue for more, putting your personal assets at risk? No. In most states, patients can sue for economic damages and non-economic damages. Economic damages include lost wages, past medical expenses, estimated future medical expenses, etc. If a patient becomes quadriplegic, it’s easy to imagine a life care plan totaling in the multi-millions. “Non-economic damages” includes pain and suffering. The combination of the two can generate a large number.
Plaintiff’s attorneys will often “make up the difference” by suing multiple defendants, including healthcare institutions.
Still, I am often asked whether a surgeon practicing in a high-risk field should purchase a $2M policy? Many of us carry $5M umbrella policies to supplement our homeowner’s coverage. If the difference between a $1 and $2M policy were merely the cost of a standard personal umbrella policy, I’d say yes, bump it up to $2M. But the price is more than de minimis. It is often close to double the price of the $1M policy. Ouch.
Also, having a $2M policy may increase the likelihood that the plaintiff’s attorney will not be satisfied with your $1M. They may seek policy limits of $2M. A settlement/judgment of $2M may raise your future premiums even more. May get you “non-renewed.” And may open the door to even more scrutiny with the medical licensing board, hospital credentialing committees, and insurance panels.
The Utah legislature just passed a bill, signed into law by its governor, to prohibit pursuing or collecting on a judgment against a health care provider’s personal income or assets, based on several conditions.
78B-3-405.5. Economic damages — Judgments against personal assets.
(4) A plaintiff may not pursue, collect, or execute on a judgment against an individual health care provider’s personal income or assets, unless the court finds that:
- the provider’s conduct was willful and malicious or intentionally fraudulent; or
- the defendant provider failed to maintain an insurance policy with a policy limit of at least $1,000,000.
So, just be honest and well-intentioned and carry a $1M policy.
In addition, prior to any award of damages, the plaintiff cannot point to the fact that the doctor is wealthy and could afford a giant judgment.
(5) Prior to any award of damages to a plaintiff, a plaintiff may not make allegations that the court finds:
- are irrelevant to the adjudication of the claims at issue;
- are made primarily to coerce or induce settlement in an individual defendant provider; and
- pertain to a provider’s personal income or assets.
But wait, there’s more. The plaintiff can be stuck with your attorney’s fees if they pursue a meritless case to the end.
Section 5, Section 78B-3-418.5: Attorney fees.
(1) The court may award attorney fees and costs to a respondent provider if:
(a)
- a prelitigation review panel renders an opinion under Subsection 78B-3-418(2)(a) that a claimant’s claim or cause of action has no merit; or
- the court finds that the claimant did not receive a certificate of compliance because the plaintiff failed to reasonably cooperate in the scheduling of the prelitigation panel review under Subsection 78B-3-416(4)(f);
(b) the claimant proceeds to litigate the malpractice action against a health care provider without obtaining an affidavit of merit under Section 78B-3-423; and
(c) the court finds that the claimant did not substantially prevail.
This is substantive tort reform. Going forward, I do not expect physicians in Utah to carry policy limits over $1M.
What do you think?
