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The Perfect Storm:
The Current Medical Malpractice Crisis
Summer 2002 Update

The medical malpractice industry in Florida is experiencing dramatic changes as a result of the hardening of the marketplace. In the past 36 months, nine carriers operating in Florida have either been liquidated, forced into rehabilitation, or have decided to stop selling medical malpractice insurance altogether. The insurance companies formerly known as Unisource, Gulf Atlantic, Caduceus, Frontier, Reliance, and PHICO are extinct; while St. Paul, Scottsdale, and Fireman’s Fund have decided to get out of the medical malpractice line of business. A tenth carrier, Clarendon, has ended its affiliation with Gulf Atlantic and is no longer writing in Florida. In addition, three more carriers have been bought out by another company (PPTF by ProNational, ProNational by Medical Assurance, and Medical Protective by General Electric).

In the mid 1990s, carriers were flooding into the state of Florida but today there is a mass exodus. Three years ago, five professional liability insurance carriers were headquartered in Florida; today there is only one: FPIC. During those three years, rates have increased on average by 50%. In the past year alone, the average rate increase by all carriers still operating in Florida is more than 25% and rate increases in 2002 are expected to be above 25% once more.

The following scenarios have contributed to the malpractice crisis:

  • Erosion in patient loyalty attributed to the increasing presence of managed care
  • Decrease in communication between physician and patient
  • A shift from cases tried for committed acts to a world where omitted acts are equally important
  • More trial lawyers today than ever before
  • Jury panel selection criteria has changed – a potential juror now only needs to be 18 years of age and have a driver’s license
  • Television shows such as "Who Wants to be a Millionaire" have lessened the aura of a million dollars
  • The average malpractice settlement in Florida has increased dramatically
  • Jury verdicts are the yardstick by which all cases for settlement are measured and the average jury verdict has increased 57% in the last five years nationally, from $2 million to $3.5 million

With all this bleak news, what is a physician to do?

One important thing to do is become insured with a stable carrier that will be with you during the good times and the bad. FPIC, the endorsed carrier of the Florida Medical Association since 1975 and the Florida Obstetric and Gynecologic Society’s endorsed carrier, has been the only continuous professional liability insurance company in the state of Florida since 1975 and is now the only carrier still headquartered in the state.

Finally, you want a carrier who will fight for you on Capital Hill. FPIC is one of two carriers in the state to have an active lobbying force in Tallahasee.

When selecting your professional liability carrier it is extremely important to select one that will weather the storm and be there for you in both the courtroom and in the halls of the Capital.

This article is provided by First Professionals Ins. Co., Inc.