Choosing a MPL Carrier: Admited, Surplus, or RRG
Gallagher Healthcare :: Industry Insights
By Bryan Blasingame | 9/12/2014If you are searching for the best medical malpractice insurance policies, you may be faced with terms like admitted and regulated coverage, Risk Retention Groups and surplus lines. What follows below is helpful information about the multiple forms of malpractice insurance available to you.
Different forms of medical malpractice insurance may offer similar options. They can all have essentially the same features or they can be vastly different. This is pertinent information about the coverage and features that you will commonly find for the types of policies you need.
Medical malpractice insurance companies offer different types of coverage, and you may need to go with a non-admitted carrier. The policies written by non-admitted insurers are not necessarily inferior to those from admitted carriers. The policies are best judged on the wording of the policy, the degree to which terms are competitive and the carrier’s financial strength.
Admitted (Standard Market)
Admitted or standard market carriers are insurance companies who have been approved by the insurance commissioner of their state. The commissioner for the state will look into the company’s policy forms, financials and rating model before providing approval.
RRG (Risk Retention Groups)
Risk Retention Groups (RRGs) are group insurers or group self-insurance plans that operate under the 1986 Risk Retention Act (RRA). This covers all exposure to liability, including product liability, professional liability, medical malpractice, liability of officers and directors, errors and omissions and general liability.
RRGs must be formed as liability insurance companies in at least one state. The RRG policyholders are its owners, as well, and the membership is to be limited to persons or organizations that are engaged in similar activities or businesses. This means they will be exposed to the same general types of risk exposure.
Surplus Lines
Excess and surplus insurance lines form a segment of the marketplace for insurance that allows policy purchasers to buy malpractice, casualty and property insurance through their state-regulated insurance market. Under this plan, insurance companies, brokers, agents and policyholders can all design specific coverage and then negotiate the pricing based on the risks that will be secured. The excess and surplus market can adapt swiftly to market condition changes, and to the needs of commercial entities and consumers seeking this protection.
How to Choose the Right Policy for Your Practice
Policy Features
Each insurance policy you consider will have features that are important to your business. Go over the specific features of each policy you are comparing before you decide which one will work the best for you.
Deductible
You will find when you investigate the various policies that are suited for you that most of the time there is not a deductible in standard admitted markets
Consent
When you purchase a medical malpractice policy, it is with the understanding that some claims will not be under your control or consent when it comes to settling the claim. In some cases, an insurance carrier may close a claim without a doctor’s consent.
Defense Costs
In studies of malpractice claims between 1985 and 2008, the average cost for defense when cases went to trial was over $27,000. Claims that do go to trial are quite costly, but more cases are dismissed than tried.
Defense costs for medical malpractice insurance may be either inside or outside the limits.
Tail Provisions
Tail provisions deal with aspects of medical malpractice policies that may vary. This includes free tail triggers like:
- Death
- Disability
- Age requirements for retirements
- Length of time you are with a carrier
- Some tail provisions are limited in years, while others are unlimited.
Price
The price offered by various insurance companies will vary, depending on the type and amount of coverage you select. You may be able to save money by going with companies with lower grades, but that is usually riskier.
Solvency of Carrier
Medical malpractice insurance carriers are routinely monitored for solvency by state regulators. They look at specific financial information that will inform them when a carrier is in danger of becoming insolvent. Each state has its own requirements for monitoring financial records of the insurance companies in that state.
Conclusion
There are many forms of medical malpractice insurance, and it is important for your practice to make your choice based on the features and pricing offered, rather than on the form of insurance being provided.
It is best for your practice to have a medical malpractice insurance expert like Gallagher Healthcare go over your options with you, so that you can make an informed decision.