E&O: Errors & Omissions

Physicians

The physicians medical malpractice market is dominated by smaller medical malpractice insurers, including many mutuals, and medical malpractice divisions of large multi-line insurers. However, most of these insurers focus on the traditional physician and do not have the resources to handle "hard-to-place" physicians. This market segment can be a significant opportunity for new sales, particularly as the insurance market changes.

The Market

The medical industry has been undergoing significant change in the last decade, and the medical malpractice insurance market has responded accordingly. Much of the change in the medical industry has been driven by managed care initiatives and the medical communities response to it.

On top of this change is the deteriorating loss experience of medical malpractice insurers and the resulting recent tightening insurance market. With the tightening market and changes driven by managed care, some medical risks are being forced into the specialty lines market. Hard-to-place physicians is a growing market segment and Mercator Risk Services Inc. ("Mercator" or "Mercator Risk Services") can provide assistance.

The tightening medical malpractice insurance market is manifesting itself in a number of different ways:

Tighter underwriting by traditional medical malpractice underwriters is pushing "marginal" accounts into the specialty lines market, while insurer withdrawals are putting whole books of medical accounts into the market. Restricted terms and conditions also provide an opportunity for writing a new account. For example, certain medical professionals may have difficulty getting full prior acts coverage or adequate limits for their practice.

Besides the large commercial writers and smaller medical malpractice insurers, the health care market is served by a handful of specialty writers. Mercator Risk Services has access to a number of markets that will entertain risks that are no longer insurable with standard and traditional insurers.

With underwriting standards tightening and rates rising, more physicians are fitting the hard-to-place mold. For example, a growing hard-to-place segment is physicians involved in internet health care ventures. In addition, specialty physician medical groups, such as multi-specialty or single specialty groups, can often find alternative medical malpractice proposals broader and more competitive than standard markets. Examples of hard-to-place physician accounts include physicians with or involved in the following:

One example of an unusual medical malpractice risk is a physician involved part-time with a medical resource web site. The physician provided medical content within his specialty, and was concerned that his traditional medical malpractice policy would not cover him if a claim arose. Mercator Risk Services provided medical malpractice coverage for his internet activities.

Medical Malpractice Insurance

Medical malpractice insurance is professional liability insurance, sometimes called errors and omissions or E&O insurance, for medical professionals. This coverage is available from a number of specialty lines insurers. Coverage and pricing varies depending upon the specific medical services provided and location.

Coverage is typically provided on a claims-made basis. Limits and deductibles vary with the size and type of insured organization, but generally start at $1.0 million.

Mercator Risk Services provides coverage for a wide range of medical accounts, including physicians. Please let us know your client's needs and we will provide you with information and assistance with your particular situation or account, and professional liability coverage.

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