Changing malpractice insurance carriers

April 2, 2008

In a time when every dollar counts, I find I am constantly sifting through offers for cheaper malpractice insurance. Assuming all things are equal and that no tail coverage is needed, is there a disadvantage to changing malpractice carriers frequently?

Q. In a time when every dollar counts, I find I am constantly sifting through offers for cheaper malpractice insurance. Assuming all things are equal and that no tail coverage is needed, is there a disadvantage to changing malpracticecarriers frequently?

A. Using the assumptions given (no need for tail coverage and all things being equal), there would be no disadvantage except for some potential confusion as to which company is responsible for a particular claim and the inconvenience of sending out notifications regarding the change. On the other hand, I question whether all things are, indeed, equal. Some of the companies sending such offers may have lower financial ratings than the ones that are being abandoned, so there’s a chance that they could fail before or during the time a claim is processed. Moreover, the individual contracts should be carefully examined to make sure that they have all the same provisions and safeguards. This needs to be done on a paragraph by paragraph and issue by issue basis. One company, for example, may limit your ability to perform certain procedures without shifting your class or paying for an additional rider, while another may modify a “consent to settle” clause so that it is not to your advantage.

If there is sufficient savings involved to warrant both the change and the inconvenience of notifying everyone who needs to be notified (e.g., hospitals, insurance companies, etc.), then by all means do it, but keep the above in mind. You’d be wise, too, to have a knowledgeable health law attorney review the contract before you sign it.

Eric E. Shore, DO, JD

Eric Shore, an attorney concentrating in healthcare law, is a founding member and partner in the law firm of Kane & Shore, LLC in Philadelphia. Before entering the full-time practice of law, he practiced internal medicine for more than 25 years and earned an MBA in healthcare management. He has been medical director at several long term care facilities, a hospital chief of service, and a medical staff officer, as well as being a fellow of the American College of Legal Medicine, the American Academy of Family Physicians, and the American College of Medical Quality. He can be reached at eshore@KaneShore.com, or 610-664-4182.

The answers to these queries are general opinions and are not intended as substitutes for legal advice. You should not rely on these replies in making decisions involving questions of law, but should instead consult with competentlegal counsel.