Here's an interesting idea for an ancillary business: a law firm selling insurance to doctors!
Philadelphia-based Duane Morris wants to ease Florida's malpractice crisis -- by selling malpractice insurance. The Am Law 100 firm applied to Florida regulators Tuesday to set up an insurance exchange like the one it launched in Pennsylvania eight months ago. To join the exchange, doctors would contribute capital plus premiums to become part-owners and pool their risk. Just four companies presently underwrite malpractice insurance in Florida, notes The Palm Beach Post
Law firm wants to offer malpractice insurance
By Phil Galewitz, Palm Beach Post Staff Writer
Wednesday, August 20, 2003
In the medical malpractice insurance debate that ended last week when Gov. Jeb Bush signed a reform bill into law, doctors' biggest adversaries were lawyers.
Now a large national law firm wants to help Florida doctors who are struggling to find medical malpractice insurance by offering them a new option.
Philadelphia-based Duane Morris, which has written about 500 malpractice policies through its 8-month-old Pennsylvania Healthcare Providers Insurance Exchange, on Tuesday applied to Florida's Department of Insurance Regulation to create a similar company for Florida doctors. It hopes to get approval to start marketing later this year.
In an exchange, doctors share insurance risk. Essentially, each participant is also an owner who contributes capital in addition to paying premiums. Only four companies now are writing medical malpractice insurance policies for Florida doctors, down from about 30 in the late 1990s.
T. Thomas Gaudiosi, president and CEO of Florida Healthcare Providers Insurance Exchange's management company, said he expects about 700 physicians to sign up over the next year or so. In addition to paying premiums, doctors must pay a "surplus contribution," or the equivalent of a membership fee, and agree to conditions of membership that include early reporting of adverse outcomes, coordination of legal defenses and mandatory risk-management education. The contribution in Pennsylvania ranges from $6,000 to $30,000, depending on specialty -- about half the annual premium.
Physicians shouldn't expect discounted rates, Gaudiosi said. "The pitch to physicians is that we're trying to stabilize the marketplace," he said.
Gaudiosi said his company will keep malpractice premiums stable, rather than have rates swing wildly as they have in the past decade.
Duane Morris is among the 100 largest U.S. law firms, with offices in 21 cities, including Palm Beach. The firm decided to get into the malpractice insurance field after some of its health care clients complained about the rising cost of the insurance and lack of competition in the market.
One other company, Health Care Underwriters of Florida, has recently applied to the state to offer medical liability coverage. The state last month approved Delaware-based American Alternative Insurance Corp. to write malpractice insurance policies.