brenton19812000 asked:
I am trying to understand what factors affect the rates that a surgeon will pay for malpractice insurance. Do new surgeons start at the same rate? What effect does a lawsuit have on a doctors rates? If a surgeon is sued, and the case is tossed out, does this affect their rates? What if they lose the case? Or if they settle out of court?
I am trying to find out what effects the rates a doctor is charged and how if there premiums will go down for good behaviour over time.
New surgeons do NOT start at the same rate as old ones, because of the way policies work. Med mal policies are on a claims made basis – they ONLY cover claims made during the policy period, and only claims that happened AFTER the retroactive date. So the first year a surgeon has a policy, it covers claims for that first year. The SECOND year, the policy has a retroactive date that goes back to the first year of the policy, so effectively, it has twice as many possible claims. The 10th year, the retro date goes back TEN years. So the longer you keep the policy, the more claims it can cover, and the more it costs. THAT’S the main reason why rates go up significantly for the first five years a med mal policy is in place. You can count on it.
When claims are paid, that also adversely affects the rates – but it’s more of a judgement call on the underwriter’s place. Claims payments INCLUDE defense costs, so ANY costs incurred, even if the case is thrown out, and ESPECIALLY if the case settles, counts.
Rates do NOT go down over time, as the actual claims exposure goes up, not down. The only time you see the rates go down is if you switch companies – which means you then get a new retro date, and all those other claims are now, well, uninsured.
Other rating factors include: type of specialty, the hospital where you have operating room priveleges, the city and state of practice, the number of hours a week you work.
The answer from catz is right on point easy to understand. It is the most accurate you will receive here!!