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Monthly Archives: January 2014

How Are Defense Costs Handled by a Physician and Surgeon Malpractice Insurance Company in Florida?


One of the most overlooked features of a medical malpractice insurance policy is how the company handles the cost of defense—the cost of lawyers, court fees, and trial fees when a case is taken to court. Sometimes, in an effort to cut costs, insurance companies can tweak this important coverage. The physician is the one hurt in the event of a large claim.

I would first like to explain what it means to have defense costs inside or outside the limit of liability. When we mention the limit of liability, we mean the limit of liability that is noted on the declarations page of the medical malpractice insurance policy. So, if a physician or surgeon in Florida has policy limits of $250,000 per occurrence/$750,000 aggregate, it means that, for one claim the medical malpractice insurance company is going to pay a maximum of $250,000. In one year, the total amount the medical malpractice insurance company in Florida will pay for all medical malpractice claims is $750,000.

In this case, it is obviously very important to determine whether the defense costs are paid inside or outside the limit of liability. If defense costs are paid inside the limit, and the cost of defending the doctor is $100,000, that physician now has only $150,000 available to pay a judgment or settlement. If the defense costs are paid outside the limit of liability on the medical malpractice insurance policy, the full $250,000 is available to pay a judgment and the $100,000 in lawyer fees, investigation expenses, defense and appeal expenses will not erode the physician’s limit of liability.

At first glance, this difference may not seem important. But if you were faced with a large claim, defense costs can add up very quickly and you could find yourself with no money left to pay a judgment or settlement of additional claims. Once the liability limits have been used up, your medical malpractice insurance company has no further obligation to pay any claim, judgment or claim expense or to defend or continue to defend you.

So, when purchasing or renewing your medical malpractice insurance in Florida, review it carefully with your agent to be sure defense costs are outside the limit of liability. This small difference could spell the difference between success or failure of your practice.

Barbara Gracey Backer


Barbara Gracey Backer is the Vice-President of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Professional and Personal Insurance. She may be contacted at 800-272-6055 X118 or at barbara@gbifl.com.

How Are Defense Costs Handled by a Dental Malpractice Insurance Company?


We have been asked by our dental malpractice insurance clients to explain the difference between defense costs inside the limit and defense costs outside the limit of liability on a dental malpractice insurance policy. This is an often overlooked difference in policy forms that can have a profound impact if a dentist is sued for malpractice.

Defense costs are the costs to defend a dentist in the event he or she is sued for medical malpractice. The costs are handled by the dental malpractice insurance company. Specifically, we are talking about the amount of money a dental malpractice insurance company pays for lawyers and trial fees and court fees when a case is taken to court. Even if the dental malpractice case is settled out of court, there may be substantial attorney fees. When we mention the limit of liability, we mean the limit of liability that is noted on the declarations page of the dental malpractice insurance policy. So, if a dentist in Florida has limits of $1,000,000/$3,000,000, that means that, for one claim the dental malpractice insurance company is going to pay a maximum of $1 million. In one year, the total amount the dental malpractice insurance company will pay for all dental malpractice claims is $3,000,000.

In this case, it is obviously very important to determine whether the defense costs are paid inside or outside the limit of liability. If they are paid inside the limit, and the costs of defending the dentist are $100,000, that dentist now has only $900,000 available to pay a judgment. If the defense costs are paid outside the limit of liability on the dental malpractice insurance policy, the full $1,000,000 is available to pay a judgment and the $100,000 defense cost is paid in addition to the judgment.

Sometimes, in an effort to save money on dental malpractice insurance policy, a dentist might choose a policy with defense costs inside the limit of liability without realizing it. He or she will pay dearly in the event of a large claim. Be sure to check with a knowledgeable agent about exactly how your dental malpractice insurance policy is set up so you are well protected in the event of a claim.

John Gracey Backer, CPA


John Gracey Backer, CPA, is the Treasurer of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Malpractice, Professional and Personal Insurance for the Healthcare Provider. He can be contacted at 800-272-6055 ext 128, or at john@gbifl.com.

Medical Malpractice Insurance for Physicians and Surgeons in Single-Specialty and Multi-Specialty Groups


Medical Malpractice Insurance for Physicians and Surgeons in Single-Specialty and Multi-Specialty Groups
It is commonly known that physicians and surgeons are merging into larger groups in Florida. Some of these are single-specialty groups and some are multi-specialty. The driving force behind this trend is the desire to reduce expenses. Medical malpractice insurance is surely one of the largest expenses a group faces and should be addressed early to minimize problems.

When smaller practices merge into larger ones, it is not uncommon for doctors to then be insured by different medical malpractice insurance carriers. The group will undoubtedly move to one carrier, usually the one representing the larger entity. It is important for all physicians in a group to be insured by the same carrier, as the group will not want to negotiate among several insurers. This issue should be addressed before the merger takes place, so the new malpractice insurance coverage is active on the first day of operations. If the merging group has its own corporate coverage, it should be sure to maintain that coverage until accounts receivable are zeroed out and the corporations are closed.

In addition to ease of adjusting claims, there are other advantages for the group being insured by one medical malpractice insurance carrier:

  • The cost per physician is usually less, as the group is usually able to negotiate credits;
  • Physicians with prior medical malpractice claims may now be able to secure coverage from a standard carrier;
  • The group can take advantage of free on-site risk management seminars and courses;
  • Agents compete for group business, and can offer competitive bids.

It is very important for the group to be insured with a quality medical malpractice insurance company. We have seen too many cases where, in a desire to save premium, the group chooses a non-rated or poorly rated carrier, only to be disappointed with the claims handling later on. We believe that the company should be “A” rated by A.M. Best and Company, and focus solely on writing medical professional liability insurance for physicians and surgeons. Society credits, loss free credits, risk management credits, and discretionary credits are usually available for quality risks. Some of the best medical malpractice insurance carriers offer dividend and other profit-sharing plans to secure new business and reward loyalty.

If the physician and surgeon group is working with an experienced medical malpractice insurance agent, that agent should be proactive in “shopping” the group’s insurance each year. In some cases, it will be best to stay with the same company—for a number of reasons. However, it has been our experience that everyone benefits with competition. In the end, the physician group receives the best possible price with the best possible company—a win for the doctor for sure.

How Do I Choose the Right Company for my Dental Malpractice Insurance?


Choosing the right company to insure you for your Dental Malpractice Insurance is one of the most important decisions a dentist will make during his career. A dentist needs to have malpractice insurance to cover claims for dental mistakes, misdiagnosis, or other situations where a patient suffers injury. There are a number of companies out there anxious to write your dental malpractice insurance policy. The one you select can have important ramifications in the event of a claim.

Because we have been in the business of administering Dental Malpractice Insurance policies in Florida for many years, we have seen insurance companies come and go. Many of them have offered low prices. They have marketed aggressively. They have undercut the best carriers in the state of Florida. And then they are gone, leaving wreckage behind and dentists unable to find quality coverage because they have chosen an inferior carrier.
We have a few thoughts on the subject of choosing the right Dental Malpractice Insurance Company in Florida.

First of all, choose a company that has a strong rating by A.M. Best & Co., the gold standard in rating the financial strength and stability of an insurance company. The worldwide rating and information company performs a thorough vetting of each insurance company and rates them according to their overall strength and ability to pay claims.

Second, choose a company that specializes in coverage for dentists–members of your profession. Many companies sell dental malpractice insurance as an offshoot of their physician and surgeon malpractice business. You want a company that knows dentistry and focuses on your specialty. You want a company with a strong claims history. It is a good practice to ask your colleagues for suggestions, especially those colleagues who have been sued for malpractice and have personal experience with a dental malpractice insurer’s willingness and ability to defend and/or pay claims in a timely manner.

Third, choose a company with a strong policy. Comparing policies is more than determining which is the least expensive, or which provides the highest dollar amount of coverage. The added coverages and features that you need—cyber liability coverage, DPR defense coverage, free tail at retirement, etc. add up very quickly and can spell a real difference for your practice.

Fourth, choose a company that offers credits for claims-free experience and for risk management. These credits can go a long way toward reducing your premium over the long term. A quality risk management program, aimed at the dentist, can help reduce the likelihood that you will have a claim in the first place.

So, you can see that it is vital that you are insured with the right Dental Malpractice Insurance Company in Florida. Our staff stands ready and able to help you.

John Gracey Backer, CPA


John Gracey Backer, CPA, is the Treasurer of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Malpractice, Professional and Personal Insurance for the Healthcare Provider. He can be contacted at 800-272-6055 ext 128, or at john@gbifl.com.

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