A plaintiff attorney demanded $1 million as a full and final settlement from a Connecticut neurologist. However, that was before he was aware of the policy limits, which were double that amount. The attorney promptly withdrew the offer, demanding the entire $2 million.

“Plaintiffs in medical malpractice cases will always follow the money, meaning the insurance dollars available in the policy limits,” says Susan Martin, RN, JD, executive vice president of litigation management and loss control in the Plano, TX, office of AMS Management Group, which is a medical professional liability insurer. If $1 million in policy limits is the norm, would double or triple that amount offer more peace of mind? It could be just the opposite if it makes the EP a target.

“Emergency physicians should spend their hard-earned dollars to make sure their assets are protected from third parties instead of spending the money on higher premiums for larger limits,” Martin offers.

A smaller policy limit may require insurance carriers to “tender” the policy sooner in the lawsuit. This is because large damages in the case may exceed policy limits. On the other hand, policy limits that are higher than community norms will make the ED provider and/or the group a bigger target. In Texas, EPs typically carry lower limits of around $500,000 due to tort reform, whereas $1 million is the norm in many states.

“Hospitals are looking for ways to limit their risks. They are starting to demand higher policy limits for emergency physicians,” Martin notes. This can make the EP the focus of litigation, more so than other defendants with lower policy limits. For instance, if a hospital demands EPs carry $1 million in coverage, yet the surgeons on staff carry only $500,000, this encourages attorneys to come up with negligence theories against the EPs. “This may become a contractual issue with EM groups,” Martin notes.

Anna Berent, JD, claims counsel at Western Litigation in Houston, says, “Plaintiff attorneys are quick to jump on the providers who have insurance in addition to their primary limits.” Berent recommends ED providers have as much insurance as is required for the particular locale and on par with colleagues. Some ED providers are mandated through a contractual relationship with their hospitals or staffing groups to maintain excess insurance.

“However, irrespective of available insurance, nothing substitutes a solid defense counsel evaluation of liability among codefendants,” Berent explains.

In a recent case that went to trial, a jury found an ED provider with excess coverage not responsible. “Yet the ED provider who only had primary coverage was handed an above-limits verdict,” Berent reports.

In some cases involving liability and sizable damages, an ED provider may simply tender their policy limit, either to the court or to plaintiff’s counsel.

“This may be a prudent strategy to nip all further exposure in the bud and stop paying defense costs,” Berent says.