by Jenn Negley, Vice President, Risk Strategies Company
Throughout my career, I have often had those thoughts in my head while trying to assist medical groups or individual physicians resistant to working with an agent or broker. While some skepticism is warranted, and we acknowledge that any industry has both positive and negative aspects, there are specific factors to consider in medical malpractice insurance that can increase the likelihood of achieving positive results. How can you determine the professionalism of an agent you are working with, such as myself, and help us assist you effectively?
Several factors should be considered, starting with an individual’s approach and the carrier and policy solutions they recommend. In most instances, these factors have significant consequences and can help you determine if this is an individual you should work with.
Malpractice insurance is a highly specialized market with significant financial implications. If you have an agent pitching you other coverages and adding malpractice insurance at the last minute, I would be wary. Sticking with someone who focuses on medical malpractice insurance is always best; not only will you benefit from their knowledge, but it often impacts the carriers they have access to, which leads us to the second item to keep an eye out for. If an agent is pushing one carrier, this is always a red flag. The most qualified agent should be able to provide you with multiple alternatives, giving you a nonbiased view of what is available. Another consideration is whether the carrier has an A rating from A.M. Best. In the insurance world, it is advisable to avoid lesser-rated companies, and I would not rely on ratings from any rating agency other than A.M. Best, which is the gold standard.
The type of policy an agent pushes might also be a cause for concern. If an agent is asking you to change your coverage type from occurrence to claims made to save money, they are doing you a disservice. While this will generate savings in the first 2 to 3 years, the scheduled premium increases will bring you back to your original cost and possibly more. In group settings, you will often have to amend employment contracts to address who is responsible for tail costs when a provider leaves your group. If your practice ever sells, most buyers will likely require you to purchase a tail for the entire group, and the cost can range from 100% to 200% of your current premium.
When working with a specialty broker, you also gain the advantage of a service team that knows how to navigate the processes for each carrier because of the volume of business they place. With that volume, you typically have a dedicated underwriting team that builds strong relationships, allowing for more collaborative efforts to provide solutions that would not usually be available. In competitive markets, this could result in increased savings, and in a challenging market, it could limit rate increases. Don’t be fooled into assuming that large-name brokerages are the best solutions. Typically, it comes down to the volume that a particular office does, not what the brokerage does as a whole, and again circles back to the question of whether they specialize in this coverage.
We are all too aware of the financial stress healthcare is under. Still, there are professionals readily available to serve as an honest partner in alleviating those pressures in a way that protects your longterm security and meets your needs. I hope these market insights, in a small way, help you in your future endeavors. r practice, and your patients, depend on it.
For more information, please contact Jenn Negley, Vice President, Risk Strategies Company at 267-251-2233 or JNegley@ Risk Strategies.com.