One practice--two med-mal carriers

August 4, 2006

A new physician just joined me in practice with the intention of becoming my partner in the future. However, we have different professional liability insurance carriers. Is this a problem? I suggested that we both use the same company, but he refuses because my premiums are more expensive than his.

Q: A new physician just joined me in practice with the intention of becoming my partner in the future. However, we have different professional liability insurance carriers. Is this a problem? I suggested that we both use the same company, but he refuses because my premiums are more expensive than his.

A: There are two drawbacks to having different carriers. First, neither carrier may be willing to ensure the corporate entity itself. That means the corporation-and, in particular, its receivables-would not be protected from a judgment against it. Generally, med-mal companies will insure the corporation only if they insure all the doctors, or at least most of them.

Second, let's say you and your partner participated in the care of a patient who later sues both of you for malpractice. When there are two different carriers involved, there's likely be a dispute over which one has the primary obligation to provide the defense.

You both should ask your respective carriers about these issues, and see what they suggest. Perhaps you could persuade your partner to get on board with your carrier by offering to split the difference between the two premiums