Higher coverage limits could make you a target

You might be seen by plaintiffs as a ‘deep pocket’

Physicians carrying a high coverage limit can make themselves a target as a “deep pocket” for any incident or claim, warns Elke Kirsten-Brauer, Dipl-Kfm, executive vice president and chief underwriting officer for MGIS Underwriting Managers, a business unit of The MGIS Companies, based in Salt Lake City, UT.

“The selection of an appropriate limit of liability is a critical element of medical-professional liability coverage,” says Kirsten-Brauer. “Your professional broker is there to assist you in this decision.” She says to consider these items:

• With the trend of hospitals or health systems buying medical practices, some physicians will be covered by the hospital’s captive or liability program.

“This may provide higher limits to the physician than what they may get on their own,” says Kirsten-Brauer.

• If physicians practice in a state with joint and several liability laws, they might not want to carry higher limits so they do not become the target defendant.

• Coverage requirements not only depend on hospitals or preferred provider organizations the physician contracts with, but also state requirements.

Physicians operating in multiple states have to consider such state’s unique limit and/or state fund requirements, Kirsten-Brauer says.

“Since the last malpractice availability crisis, the limit of 1 million/3 million is most common for a physician’s professional liability coverage in most states, though states have different requirements,” she says.

• Physicians who own or operate a surgery center or endoscopic center should require contracting providers to carry their own specific set of limits with a financially strong, rated carrier.

• Liability limits should bear a reasonable relationship to the physician’s overall net worth.

“You want the limit high enough so the plaintiff is not eyeing your personal assets because your liability limits seem inadequate to cover the claimed loss,” says Kirsten-Brauer.

• Physicians normally should keep coverage limits in line with what others in their profession are carrying.

“It is important that your limit of liability be perceived by actual and potential claimants as reasonable within the context of the broader professional community,” she says.


For more information on coverage limits, contact:

  • Elke Kirsten-Brauer, Dipl-Kfm, Chief Underwriting Officer, MGIS Underwriting Managers, Salt Lake City, UT. Phone: (801) 990-2400, Ext. 139. Email: elke. kirsten-brauer@mgis.com.