History of the Florida Malpractice Market

Prior to tort reform in 2003, Florida was branded with being a highly unfavorable state for both doctors and med mal carriers. Among the riskiest counties to practice included Dade County, Broward County Palm Beach County because they generated the most claims. Comparatively, physicians practicing in Florida paid much more for the same coverage than those practicing in the same field but outside the state. For this reason, many doctors decided to go “bare”. In other words, a physician chooses to practice without the security of medical malpractice insurance. In order for a physician to be able to practice without malpractice insurance, they must follow certain conditions.

• Post bond
• Establish an escrow account
• Obtain an irrevocable letter of credit
• Hang a sign outside their office to inform patients that they don’t carry insurance

Florida Med Mal Market Summary

Since the approval of tort reform, Florida has seen substantial growth in many sectors of its medical malpractice insurance market. It has become the fifth largest market based on direct written premium; of which 80% of the total written premium is comprised of 22 carriers, an increase from years past.

A previously unavailable policy option, known as a consent to settle provision, has been approved and will be effective as of October 2011. A consent to settle provision gives the physician an option to settle the claim outside of court, in order to avoid paying more in damages and legal fees. Among other policy options carriers in Florida offer include:

• Claims made maturity of 5 years
• Incident coverage trigger
• Defense costs outside the limits of liability
• Unlimited tail length

Although physicians have the option of choosing higher limits, many choose to carry limits of $250,000/$750,000. Hospitals allow doctors more privileges if they choose the lower limits. Other limits of liability offered in Florida include per claim limits of $1,000,000 and an aggregate limit of $3,000,000.

Tort Reform for Florida

Florida tort reform successfully placed a cap on non-economic damages at $500,000. Nevertheless, that cap can be increased to $1.5 million based on who is at fault. Capping damages for claims has stabilized malpractice rates at a level that some doctors believe is too high. Because of the persistence of high malpractice rate in the market, some doctors still choose to go “bare”.

Major Carriers

• First Professionals Insurance Company
• Florida Doctors Insurance Company
• The Doctors Company
• MAG Mutual Insurance Company
• Medical Protective Company