Even though the cost of medical malpractice insurance has stabilized in the last few years, it is still among the highest expenses faced by most medical professionals.
An American Medical Association (AMA) research report titled “Medical Professional Liability Insurance Premiums: An Overview of the Market from 2008 to 2017,” indicates that rates have remained largely unchanged for the past 10 years.
Using data from its Annual Rate Survey, the AMA report showed that 74.2 percent of malpractice insurance premium categories were the same in 2017 as in the previous year, while 12.4 percent of categories had decreasing rates year over year.
Yet, the AMA concluded that “despite the increasing stability in liability premiums, the prospects for the near future are less than certain… The medical liability market bears close monitoring to see whether stability in premiums will continue.”
How your speciality influences your rate
The report shows average premium rates for three medical specialties in seven regions, as these are the two variables that most determine the cost of coverage.
The reason your speciality is of major concern to an insurer is because certain specialities carry more risk of adverse events and potential lawsuits than others. This typically leads to higher judgements and legal bills.
In addition to the higher risk, some specialists will also require higher limits of liability coverage. Therefore specialities that fall into a riskier category will require higher premium rates. Those specialities include:
- Emergency room physicians.
- Cardiovascular surgeons.
- General surgeons.
- Orthopedic surgeons.
- Plastic surgeons.
The AMA report shows that obstetricians can expect to pay around $150,000 in annual premiums for malpractice insurance. If your speciality requires fewer actual procedures, you can likely get by in the neighborhood of $30,000 to $50,000. Some low-risk specialties in low-risk areas of the country will pay less than $10,000 a year for coverage.
How your location influences your rate
Your location factors into your malpractice rates for two reasons:
- Your state’s tort laws.
- The incidence rate of malpractice suits.
States that have favorable laws will enable insurers to charge less for malpractice insurance. Among the laws deemed most favorable are hard caps on non-economic damages (i.e. “pain and suffering”), case certification mandates that require plaintiffs to obtain a signed statement from a qualified expert prior to litigation, and a pre-litigation review panel process.
According to the AMA research, an internal medical professional practicing in the Los Angeles, California area paid an average of $8,274 in annual malpractice insurance premiums in 2017. The same specialty practicing in Philadelphia shelled out $25,000 for coverage, while in Miami-Dade, Florida, the annual bill was $47,700.
An overview of rates by specialty and location
The full list of premium rates in the AMA report are as follows:
- Los Angeles-Orange County, California: $49,804
- Connecticut: $170,389
- Miami-Dade, Florida: $190,829
- Cook-Madison-St. Clair, Illinois: $177,441
- New Jersey: $90,749
- Nassau-Suffolk, New York: $214,999
- Philadelphia, Pennsylvania: $119,466
- Los Angeles-Orange County, California: $41,775
- Connecticut: $65,803
- Miami-Dade, Florida: $190,829
- Cook-Madison-St. Clair, Illinois: $118,909
- New Jersey: $60,810
- Nassau-Suffolk, New York: $134,923
- Philadelphia, Pennsylvania: $85,930
- Los Angeles-Orange County, California: $8,274
- Connecticut: $34,700
- Miami-Dade, Florida: $47,707
- Cook-Madison-St. Clair, Illinois: $40,865
- New Jersey: $15,900
- Nassau-Suffolk, New York: $33,852
- Philadelphia, Pennsylvania: $24,433
Other factors that determine malpractice insurance cost
In addition to specialty and location, other factors that will determine your malpractice premium rates include:
The policy’s liability limits. Medical malpractice insurance policies will limit the amount of liability they will cover in a year. A typical policy will set a cap of $1 million per occurrence and $3 million in total liability claims in a year.
Keep in mind that the $1 million and $3 million limits are often geared toward specialists with a higher incidence of malpractice claims and higher lawsuit and judgement amounts, such as emergency room physicians, OB-GYNs and neurosurgeons; and/or those practicing in areas that are prone to medical malpractice lawsuits.
If your speciality has less risk of malpractice and/or you practice in an area with a lower degree of higher-dollar judgements, you can probably get by with less coverage.
Your claims history. As with other types of insurance, malpractice insurers will note your claims history. If you have had medically related lawsuits brought against you, whether they were dismissed, settled, or paid out as a judgement, you can expect to pay higher premiums than a similar doctor with no claims history.
Insurers often offer discounts for new physicians, because of a lack of claims history, although rates may increase each year until a maturity date. You can also earn discounts if you go a certain period without claims and for being board certified.
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