Who Needs Medical Malpractice Insurance?
Interacting with patients on a daily basis exposes you, your employees, and your practice to professional liability. Generally, any provider of healthcare services (or anyone that provides direct/indirect patient care) needs medical malpractice insurance. This includes doctors (medical students/residents/fellows), advanced practitioners, allied staff, and their affiliated entities. In most states, it is mandatory for doctors to carry malpractice insurance; furthermore, many hospitals require it in order to have privileges at their facilities. It is also common for healthcare insurance plans to require any doctor who participates in their program to have malpractice insurance.
Bottom line: It is wise to carry malpractice insurance, whether it’s required of your or not, due to the likelihood of you having a malpractice claim sometime in your career.
Questions to Ask
As you look for the right medical malpractice insurance coverage, work with your agent to determine:
1) Who needs to be insured?
2) In what capacity should they be insured? (individual or shared policy)
3) At what level do they need to be insured? (limits)
Key Considerations for Determining the Right Coverage
Insuring the Practice
In the event of a malpractice claim, many people can be named, including the “name on the door” i.e. the practice, itself. Corporate coverage is a frequently overlooked item when determining who needs to be insured. The practice has vicarious liability exposure that must be taken into consideration, as it may be held responsible for the acts of an employee committed within the scope of employment. Talk to a knowledgeable insurance agent to make sure that all affiliated entities are properly insured; such as solo corporations, DBAs, or any legal entity name that is affiliated with your practice.
Shared vs. Individual Policy Limits
After you have confirmed who needs to be insured, you’ll need to decide in what capacity they should be covered – individually or on a shared limit policy. Individual coverage gives the named insured their own unique policy and set of limits; whereas shared limit coverage is exactly what it sounds like, a policy that is shared among multiple people. It is generally recommended that doctors and higher-risk mid-level providers (such as CRNAs, Midwives, PAs, or NPs) carry their own individual policy limits; however, you can discuss all the available options with your agent to determine what is best for your practice. Most corporate policies will include coverage for nurses and allied staff on a shared limit basis, but you usually have the option to carve any of those providers out and insure them separately, if you feel that the risk necessitates it.
Malpractice Policy Limits
You’ll also need to decide how much coverage (what limit) is appropriate. Limits vary by state – some states have standard limits that all providers carry, and others allow you to select your own level of coverage. When determining the policy limit that is right for you, be cognizant of the varying levels of risk within your practice and be sure to comply with the requirements that may be imposed by your hospital or credentialing organization. It is possible for one provider to carry higher limits than another within the same practice, but work with your agent to ensure that the level of coverage is appropriate and acceptable with the carrier.
Tips for Midlevel Providers, Medical Students, Residents, and Fellows
Oftentimes providers do not have a choice when it comes to their malpractice insurance, particularly if it is provided for them through their employment, medical school program, etc. While you may not be able to control the type of coverage and carrier that you are using, be knowledgeable on the above topics so that you understand how you are covered in case you are ever named in a malpractice lawsuit. Be sure to obtain a copy of the policy under which you are covered and keep record of the dates of your employment. If you ever have questions about your coverage, don’t hesitate to ask your practice administrator or the appropriate person at the medical school/residency program – or contact a knowledgeable malpractice insurance agent.
Additional Coverage to Consider
Beyond medical malpractice, it may be prudent to consider billing errors & omissions coverage, cyber liability coverage, and medical director coverage, among others. Talk to your malpractice insurance agent to determine the right coverage options for your practice, and as always…the experts at Aegis are happy to discuss your unique practice needs to help you find the right malpractice coverage solution!
F.S. 458.320
458.320 Financial responsibility.—
(1) As a condition of licensing and maintaining an active license, and prior to the issuance or renewal of an active license or reactivation of an inactive license for the practice of medicine, an applicant must by one of the following methods demonstrate to the satisfaction of the board and the department financial responsibility to pay claims and costs ancillary thereto arising out of the rendering of, or the failure to render, medical care or services:
(a) Establishing and maintaining an escrow account consisting of cash or assets eligible for deposit in accordance with s. 625.52 in the per claim amounts specified in paragraph (b). The required escrow amount set forth in this paragraph may not be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim.
(b) Obtaining and maintaining professional liability coverage in an amount not less than $100,000 per claim, with a minimum annual aggregate of not less than $300,000, from an authorized insurer as defined under s. 624.09, from a surplus lines insurer as defined under s. 626.914(2), from a risk retention group as defined under s. 627.942, from the Joint Underwriting Association established under s. 627.351(4), or through a plan of self-insurance as provided in s. 627.357. The required coverage amount set forth in this paragraph may not be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim.
(c) Obtaining and maintaining an unexpired, irrevocable letter of credit, established pursuant to chapter 675, in an amount not less than $100,000 per claim, with a minimum aggregate availability of credit of not less than $300,000. The letter of credit must be payable to the physician as beneficiary upon presentment of a final judgment indicating liability and awarding damages to be paid by the physician or upon presentment of a settlement agreement signed by all parties to such agreement when such final judgment or settlement is a result of a claim arising out of the rendering of, or the failure to render, medical care and services. The letter of credit may not be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim. The letter of credit must be nonassignable and nontransferable. Such letter of credit must be issued by any bank or savings association organized and existing under the laws of this state or any bank or savings association organized under the laws of the United States which has its principal place of business in this state or has a branch office that is authorized under the laws of this state or of the United States to receive deposits in this state.
(2) Physicians who perform surgery in an ambulatory surgical center licensed under chapter 395 and, as a continuing condition of hospital staff privileges, physicians who have staff privileges must also establish financial responsibility by one of the following methods:
(a) Establishing and maintaining an escrow account consisting of cash or assets eligible for deposit in accordance with s. 625.52 in the per claim amounts specified in paragraph (b). The required escrow amount set forth in this paragraph may not be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim.
(b) Obtaining and maintaining professional liability coverage in an amount not less than $250,000 per claim, with a minimum annual aggregate of not less than $750,000 from an authorized insurer as defined under s. 624.09, from a surplus lines insurer as defined under s. 626.914(2), from a risk retention group as defined under s. 627.942, from the Joint Underwriting Association established under s. 627.351(4), through a plan of self-insurance as provided in s. 627.357, or through a plan of self-insurance which meets the conditions specified for satisfying financial responsibility in s. 766.110. The required coverage amount set forth in this paragraph may not be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim.
(c) Obtaining and maintaining an unexpired irrevocable letter of credit, established pursuant to chapter 675, in an amount not less than $250,000 per claim, with a minimum aggregate availability of credit of not less than $750,000. The letter of credit must be payable to the physician as beneficiary upon presentment of a final judgment indicating liability and awarding damages to be paid by the physician or upon presentment of a settlement agreement signed by all parties to such agreement when such final judgment or settlement is a result of a claim arising out of the rendering of, or the failure to render, medical care and services. The letter of credit may not be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim. The letter of credit must be nonassignable and nontransferable. The letter of credit must be issued by any bank or savings association organized and existing under the laws of this state or any bank or savings association organized under the laws of the United States which has its principal place of business in this state or has a branch office that is authorized under the laws of this state or of the United States to receive deposits in this state.
This subsection shall be inclusive of the coverage in subsection (1).
(3)(a) Meeting the financial responsibility requirements of this section or the criteria for any exemption from such requirements must be established at the time of issuance or renewal of a license.
(b) Any person may, at any time, submit to the department a request for an advisory opinion regarding such person’s qualifications for exemption.
(4)(a) Each insurer, self-insurer, risk retention group, or Joint Underwriting Association must promptly notify the department of cancellation or nonrenewal of insurance required by this section. Unless the physician demonstrates that he or she is otherwise in compliance with the requirements of this section, the department shall suspend the license of the physician pursuant to ss. 120.569 and 120.57 and notify all health care facilities licensed under chapter 395 of such action. Any suspension under this subsection remains in effect until the physician demonstrates compliance with the requirements of this section. If any judgments or settlements are pending at the time of suspension, those judgments or settlements must be paid in accordance with this section unless otherwise mutually agreed to in writing by the parties. This paragraph does not abrogate a judgment debtor’s obligation to satisfy the entire amount of any judgment.
(b) If financial responsibility requirements are met by maintaining an escrow account or letter of credit as provided in this section, upon the entry of an adverse final judgment arising from a medical malpractice arbitration award, from a claim of medical malpractice either in contract or tort, or from noncompliance with the terms of a settlement agreement arising from a claim of medical malpractice either in contract or tort, the licensee shall pay the entire amount of the judgment together with all accrued interest, or the amount maintained in the escrow account or provided in the letter of credit as required by this section, whichever is less, within 60 days after the date such judgment became final and subject to execution, unless otherwise mutually agreed to in writing by the parties. If timely payment is not made by the physician, the department shall suspend the license of the physician pursuant to procedures set forth in subparagraphs (5)(g)3., 4., and 5. Nothing in this paragraph shall abrogate a judgment debtor’s obligation to satisfy the entire amount of any judgment.
(5) The requirements of subsections (1), (2), and (3) do not apply to:
(a) Any person licensed under this chapter who practices medicine exclusively as an officer, employee, or agent of the Federal Government or of the state or its agencies or its subdivisions. For the purposes of this subsection, an agent of the state, its agencies, or its subdivisions is a person who is eligible for coverage under any self-insurance or insurance program authorized by the provisions of s. 768.28(16).
(b) Any person whose license has become inactive under this chapter and who is not practicing medicine in this state. Any person applying for reactivation of a license must show either that such licensee maintained tail insurance coverage which provided liability coverage for incidents that occurred on or after January 1, 1987, or the initial date of licensure in this state, whichever is later, and incidents that occurred before the date on which the license became inactive; or such licensee must submit an affidavit stating that such licensee has no unsatisfied medical malpractice judgments or settlements at the time of application for reactivation.
(c) Any person holding a limited license pursuant to s. 458.317 and practicing under the scope of such limited license.
(d) Any person licensed or certified under this chapter who practices only in conjunction with his or her teaching duties at an accredited medical school or in its main teaching hospitals. Such person may engage in the practice of medicine to the extent that such practice is incidental to and a necessary part of duties in connection with the teaching position in the medical school.
(e) Any person holding an active license under this chapter who is not practicing medicine in this state. If such person initiates or resumes any practice of medicine in this state, he or she must notify the department of such activity and fulfill the financial responsibility requirements of this section before resuming the practice of medicine in this state.
(f) Any person holding an active license under this chapter who meets all of the following criteria:
1. The licensee has held an active license to practice in this state or another state or some combination thereof for more than 15 years.
2. The licensee has either retired from the practice of medicine or maintains a part-time practice of no more than 1,000 patient contact hours per year.
3. The licensee has had no more than two claims for medical malpractice resulting in an indemnity exceeding $25,000 within the previous 5-year period.
4. The licensee has not been convicted of, or pled guilty or nolo contendere to, any criminal violation specified in this chapter or the medical practice act of any other state.
5. The licensee has not been subject within the last 10 years of practice to license revocation or suspension for any period of time; probation for a period of 3 years or longer; or a fine of $500 or more for a violation of this chapter or the medical practice act of another jurisdiction. The regulatory agency’s acceptance of a physician’s relinquishment of a license, stipulation, consent order, or other settlement, offered in response to or in anticipation of the filing of administrative charges against the physician’s license, constitutes action against the physician’s license for the purposes of this paragraph.
6. The licensee has submitted a form supplying necessary information as required by the department and an affidavit affirming compliance with this paragraph.
7. The licensee must submit biennially to the department certification stating compliance with the provisions of this paragraph. The licensee must, upon request, demonstrate to the department information verifying compliance with this paragraph.
A licensee who meets the requirements of this paragraph must post notice in the form of a sign prominently displayed in the reception area and clearly noticeable by all patients or provide a written statement to any person to whom medical services are being provided. The sign or statement must read as follows: “Under Florida law, physicians are generally required to carry medical malpractice insurance or otherwise demonstrate financial responsibility to cover potential claims for medical malpractice. However, certain part-time physicians who meet state requirements are exempt from the financial responsibility law. YOUR DOCTOR MEETS THESE REQUIREMENTS AND HAS DECIDED NOT TO CARRY MEDICAL MALPRACTICE INSURANCE. This notice is provided pursuant to Florida law.”
(g) Any person holding an active license under this chapter who agrees to meet all of the following criteria:
1. Upon the entry of an adverse final judgment arising from a medical malpractice arbitration award, from a claim of medical malpractice either in contract or tort, or from noncompliance with the terms of a settlement agreement arising from a claim of medical malpractice either in contract or tort, the licensee shall pay the judgment creditor the lesser of the entire amount of the judgment with all accrued interest or either $100,000, if the physician is licensed pursuant to this chapter but does not maintain hospital staff privileges, or $250,000, if the physician is licensed pursuant to this chapter and maintains hospital staff privileges, within 60 days after the date such judgment became final and subject to execution, unless otherwise mutually agreed to in writing by the parties. Such adverse final judgment shall include any cross-claim, counterclaim, or claim for indemnity or contribution arising from the claim of medical malpractice. Upon notification of the existence of an unsatisfied judgment or payment pursuant to this subparagraph, the department shall notify the licensee by certified mail that he or she shall be subject to disciplinary action unless, within 30 days from the date of mailing, he or she either:
a. Shows proof that the unsatisfied judgment has been paid in the amount specified in this subparagraph; or
b. Furnishes the department with a copy of a timely filed notice of appeal and either:
(I) A copy of a supersedeas bond properly posted in the amount required by law; or
(II) An order from a court of competent jurisdiction staying execution on the final judgment pending disposition of the appeal.
2. The Department of Health shall issue an emergency order suspending the license of any licensee who, after 30 days following receipt of a notice from the Department of Health, has failed to: satisfy a medical malpractice claim against him or her; furnish the Department of Health a copy of a timely filed notice of appeal; furnish the Department of Health a copy of a supersedeas bond properly posted in the amount required by law; or furnish the Department of Health an order from a court of competent jurisdiction staying execution on the final judgment pending disposition of the appeal.
3. Upon the next meeting of the probable cause panel of the board following 30 days after the date of mailing the notice of disciplinary action to the licensee, the panel shall make a determination of whether probable cause exists to take disciplinary action against the licensee pursuant to subparagraph 1.
4. If the board determines that the factual requirements of subparagraph 1. are met, it shall take disciplinary action as it deems appropriate against the licensee. Such disciplinary action shall include, at a minimum, probation of the license with the restriction that the licensee must make payments to the judgment creditor on a schedule determined by the board to be reasonable and within the financial capability of the physician. Notwithstanding any other disciplinary penalty imposed, the disciplinary penalty may include suspension of the license for a period not to exceed 5 years. In the event that an agreement to satisfy a judgment has been met, the board shall remove any restriction on the license.
5. The licensee has completed a form supplying necessary information as required by the department.
A licensee who meets the requirements of this paragraph shall be required either to post notice in the form of a sign prominently displayed in the reception area and clearly noticeable by all patients or to provide a written statement to any person to whom medical services are being provided. Such sign or statement shall state: “Under Florida law, physicians are generally required to carry medical malpractice insurance or otherwise demonstrate financial responsibility to cover potential claims for medical malpractice. YOUR DOCTOR HAS DECIDED NOT TO CARRY MEDICAL MALPRACTICE INSURANCE. This is permitted under Florida law subject to certain conditions. Florida law imposes penalties against noninsured physicians who fail to satisfy adverse judgments arising from claims of medical malpractice. This notice is provided pursuant to Florida law.”
(6) Any deceptive, untrue, or fraudulent representation by the licensee with respect to any provision of this section shall result in permanent disqualification from any exemption to mandated financial responsibility as provided in this section and shall constitute grounds for disciplinary action under s. 458.331.
(7) Any licensee who relies on any exemption from the financial responsibility requirement shall notify the department, in writing, of any change of circumstance regarding his or her qualifications for such exemption and shall demonstrate that he or she is in compliance with the requirements of this section.
(8) Notwithstanding any other provision of this section, the department shall suspend the license of any physician against whom has been entered a final judgment, arbitration award, or other order or who has entered into a settlement agreement to pay damages arising out of a claim for medical malpractice, if all appellate remedies have been exhausted and payment up to the amounts required by this section has not been made within 30 days after the entering of such judgment, award, or order or agreement, until proof of payment is received by the department or a payment schedule has been agreed upon by the physician and the claimant and presented to the department. This subsection does not apply to a physician who has met the financial responsibility requirements in paragraphs (1)(b) and (2)(b).
(9) The board shall adopt rules to implement the provisions of this section.
History.—ss. 27, 50, ch. 85-175; ss. 47, 67, ch. 86-160; s. 26, ch. 86-245; s. 22, ch. 88-1; s. 2, ch. 90-158; s. 184, ch. 91-108; s. 59, ch. 91-220; s. 4, ch. 91-429; s. 106, ch. 94-218; s. 217, ch. 96-410; s. 1089, ch. 97-103; s. 144, ch. 97-237; s. 104, ch. 97-261; s. 22, ch. 97-264; s. 20, ch. 97-273; s. 9, ch. 98-166; s. 116, ch. 2000-153; s. 20, ch. 2001-277; s. 23, ch. 2003-416; s. 75, ch. 2004-5.