State of Nevada Medical Malpractice Insurance History

Nevada’s medical professional liability insurance market has never been particularly stable. Due to nonexistent carrier commitment, demonstrated in 2002 when the state’s largest carrier, St. Paul Insurance Company, pulled out and left the market virtually free of carrier competition. Lack of carrier commitment and competition accompanied by outrageous jury verdicts resulting in massive payouts led to unaffordable premiums depleting the quality and availability of healthcare in Nevada. In response, physicians created the Nevada Medical Liability Physicians Task Force to raise attention of the crisis to the public.

In 2002, Nevada’s legislature approved the restructuring of tort legislation throughout the state. The tort reform program placed a $350,000 cap on noneconomic damages. However, exceptions to the tort reform were available to victims of gross negligence and exceptional circumstances. With this tort reform program failing to provide the desired outcome, the “Keep Our Doctors in Nevada” ballot initiative was created and approved by voters. Since the omission of the exceptions from the program, the number of claims has dropped, more doctors are entering the state and premiums have started to stabilize.

Nevada Medical Malpractice Market Summary

Claims made policies are the most common policy type in Nevada. Claims made coverage provides coverage for claims that arise during the duration of the policy as long as the incident occurred while the insured had coverage. The typical limits of liability in the state are $1,000,000 per occurrence with a $3,000,000 aggregate limit. Most hospitals require their doctors to carry these same limits of liability.

Many factors are taken into consideration when determining which carrier to choose. Common factors include:

• AM Best rating
• The year the company was founded
• Coverage trigger
• Free tail provisions

Since the mid-1970s, Nevada has had trouble maintaining a stable marketplace. One-by-one, carriers have left the state or quickly become insolvent. In the years preceding 2001, several different carriers were active in the Nevada malpractice market. Following 2001, the market began to crumble. The market leader, The St. Paul Company, along with other carriers, withdrew from Nevada. Shortly after, the insurance commissioner at the time, Alice Molasky-Arman, held a hearing, which resulted in the formation of the Medical Liability Association of Nevada (MLAN). Since then, the market has improved and stabilized encouraging market growth.

Major Insurance Companies in Nevada:

• Nevada Mutual Insurance Company
• Independent Nevada Doctors Insurance Exchange
• Medicus Insurance Company
• Capson Physicians Insurance
• The Doctors Company
• ProAssurance Company, Inc.
• Medical Protective Company
• Hudson Insurance Group