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Questions and Answers: Florida Statutes (F.S 458.320) and the Cost/Risk of Going Bare

Prepared by the THE LAW OFFICES OF CHRISTOPHER L. NULAND
For more information call 904-355-1555

What does it mean to go bare on malpractice insurance?

Under certain circumstances, Florida physicians may choose not to secure malpractice insurance and agree to pay any judgement or settlement out of their personal assets.

What coverages are required?

Generally, a physician with hospital privileges must secure coverage of at least $250,000 per incident and $1,000,000 per year aggregate. Those without hospital privileges can reduce these amounts to $100,000/$300,000.

I hear there are several alternatives. What is the difference, and what do the statutes require relative to each option?

  1. Maintain PLI of at least $250,000 per incident and $750,00 per annual aggregate. Current law requires a physician choosing this option to maintain tail insurance covering the previous biennium, as well, but the Board of Medicine has just decided to eliminate this requirement as of June.
  2. Establishing an escrow account consisting of cash or other assets "eligible for deposit" in an amount of at least $250,000; or
  3. Obtaining and maintaining an irrevocable, non-assignable, and non-transferable letter of credit in an amount of not less than $250,000 per claim from a bank or savings association.

In addition, several types of physicians are eligible not to meet the above standards. They include:

  1. A physician practicing exclusively as an agent of the federal or state government;
  2. A physician whose license is inactive and no longer practices in Florida;
  3. A physician operating under a limited license and practicing under such license; or
  4. A purely academic physician.
  5. A physician that can comply with ALL of the following:
    1. The physician must have been licensed in Florida or elsewhere for at least 15 years;
    2. The physician has no more than 1,000 patient contact hours per year;
    3. The physician has paid no more than 2 claims exceeding $25,000 over the past five years;
    4. The physician has never been convicted of or pled nolo contendere to a felony; and
    5. Has a clean Board of Medicine record for the past 10 years.

      If the physician can meet all of the above, he must also "prominently display in the reception area" the following statement:
      Under Florida law, physicians are generally required to carry medical malpractice insurance or otherwise demonstrate financial responsibility to cover potential claims for medical malpractice. However, certain part-time physicians who meet state requirements are exempt from the financial responsibility law. YOUR DOCTOR MEETS THESE REQUIREMENTS AND HAS DECIDED NOT TO CARRY MEDICAL MALPRACTICE INSURANCE. This notice is provided pursuant to Florida law.
  6. A physician may also choose to "go bare" if he/she chooses to place the above sign in their office. Should a physician choose to "go bare" in accordance with the above, however, he/she risks losing their medical license if at least $250,000 of a judgment or settlement is not paid within 30 days of the settlement or award.

What are the risks and consequences?

A physician who fails to comply with at least one of the above will not be able to renew their license. In addition, any physician that does not satisfy a judgment in at least the above amounts risks losing their license and remaining liable for the unpaid amount of the judgment.

Moreover, a physician who pays the minimum amount of a judgment, but leaves a balance, remains personally liable for the balance.

For more information, contact Christopher L. Nuland, Esq. At (904) 355-1555 or via e-mail at nulandlaw@aol.com

This information is provided as a service to our members and is not an endorsement or recommendation to pursue such course of action. You are advised to seek professional consultation in such matters as they pertain to your practice.