Self-Insuring – A Viable Alternative to Malpractice Insurance?

Ted Doran pic

Ted Doran
Image: doranlaw.com

Ted Doran is a Daytona Beach, Florida-based attorney with experience in civil litigation and representing government entities. In 2005, he obtained a jury verdict and judgment in excess of $18 million on behalf of the State of Florida as Receiver of a failed medical malpractice self-insurance fund. Ted Doran’s work on the case helped to refund over $10 million to medical care providers across Florida.

Malpractice insurance premiums vary from practice to practice. Obstetricians, for example, pay premiums ranging from $20,000 per year to $200,000 per year depending on which state they practice in. Generally, the cost of insurance is about 10 percent of billed appointments and procedures. Suit resolution can take at least three years, and is very costly.

In an attempt to avoid cost-prohibitive premiums, some doctors seek alternatives such as self-insurance. Self-insurance is a strategy in which a firm will place money aside into an account to provide for losses in the event of a malpractice suit. This solution is impractical for many, as there are legal and business obstacles to this approach. The risk of litigation is maintained by the firm, and financial disaster in the wake of a large lawsuit is a very real possibility. Some doctors in atypical situations, however, may find it worth considering self-insuring in order to keep practicing. Experts recommend that physicians considering this strategy obtain legal advice on the best way to proceed.

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