Professionals — chiropractors, attorneys, architects — anyone whose words, actions or deeds carry with them a duty to the public, need malpractice insurance. Professionals are exposed to more risk than the average person and can land in court for simply doing their jobs.
However, while most chiropractors understand the need for protection, some doctors of chiropractic instinctively believe that if they are careful and conscientious, or if they provide low-risk treatment, their patients will never sue them.
Unfortunately, this perception simply doesn’t agree with the facts. Statistics indicate that, at any given point in time, three out of every 100 chiropractors in the United States are involved in a malpractice claim. And, while total claims today are somewhat lower than a few years ago — resulting in part from improved practice risk management by DCs — jury awards are considerably higher. Regardless of trends, when you are hit with a malpractice claim, it can get very expensive, very quickly.
That’s why it’s to your benefit, as a professional, to find an insurance policy that protects your livelihood, reputation, and helps ease your emotional state in the event you are accused of malpractice.
Today, more than 20 companies offer chiropractic malpractice insurance. Some market their products in every state and others only in certain states or regions. Each has a particular business viewpoint and sells similar products at comparable prices.
For you, as a consumer, it may seem an overwhelming task to find the best value for your dollar. However, by comparing one product with another, you can make an informed decision and determine what’s right for you.
Here are some factors to consider as you research malpractice insurance and insurers:
- Does the coverage take into account what you do? Make sure the insurance policy fits your practice. Many insurers adapt a standard policy written for other health-care professionals they insure. Without really knowing what chiropractic is, these companies may “cut and paste” together a policy that may produce gaps in your coverage.
- Or, your premium may be based on your practice style and the modalities you use, which can either increase or decrease the cost. This classification system may void your policy and your malpractice defense coverage if it’s found that you performed a procedure outside your “classification.”
- How does the chiropractic professional liability company rate when compared with other property-casualty insurance companies? The New York Times reports that 60% of the costs involved in a malpractice suit are related to court costs and legal fees. With this in mind, it’s critical that the insurance company you choose has the resources to provide you with expert legal counsel throughout litigation. A good way to check is to assess a company’s financial position. You should ask about the company’s A.M. Best and Standard & Poor’s ratings. These independent rating companies evaluate the financial position, ability to pay claims and business history of most insurers in the United States. A higher rating gives some assurance to you that the company is sound. Also, check with the insurance department in the state where the insurance company conducts business. All state governments regulate the insurance industry and examine the financial condition of admitted or licensed insurance companies.
- How does the insurance provider conduct business? Insurance companies provide consumers with insurance products through several means. If the company is an “admitted” or “licensed” carrier, the state insurance department makes sure the company complies with state insurance regulations. This means the carrier is meeting the insurance laws on file with the state. In addition, admitted and licensed carriers periodically are audited for solvency, proper underwriting procedures and marketing conduct. All of these measures are intended to assure a level of consistency and solvency within the insurance industry, and ultimately, to protect the best interests of policyholders.
You may also come across a company formed as a Registered Purchasing Group (RPG). An RPG is not an insurance company; rather, it’s a group of people who form an association, which in turn buys insurance from an insurance carrier. This process is like buying group health insurance. Insureds covered by an RPG may have to pay yearly association fees. Insurance brokers may also offer chiropractic malpractice insurance. Insurance brokers are agents that sell insurance originated by an insurance carrier.
A word of caution: RPGs and insurance brokers aren’t typically rated by A.M. Best. Therefore, when you are discussing insurance protection with an RPG or an insurance broker, ask whether the insurance carrier has an A.M. Best rating. A higher rating assures the financial condition of the insurer.
- What is the insurance carrier’s claim and loss history for its chiropractors? Make sure the company you choose is forthcoming about the frequency, type and costs of its chiropractic claims. Check on complaints or problems through the state insurance department. While this type of data are usually published as part of an annual statement or other publication, it’s also good business practice to ask for references.
- Does the company provide you with risk management information to help protect you, your patients and your practice? Informing policyholders on ways to reduce the incidence of claims means offering suggestions on practice risk management pertinent to chiropractic. Look for practice risk management seminars, self-study risk management programs and literature that addresses your risk as a chiropractor.
- Does the company support the chiropractic profession and chiropractors? It’s important to choose a malpractice carrier that has more than a passing interest in your profession. Search for companies that support chiropractic research and education programs, take an active role in support of state and national professional organizations and are generally knowledgeable about chiropractic issues.
- How are premiums set and how long has the company been writing chiropractic malpractice insurance? Investigate whether the rates are actuarially sound, or if they are set artificially low in an attempt to get your business. A sound, licensed or admitted insurance carrier has a historical perspective of its business and its losses, both of which affect rates. The legal environment, too, has an impact on the company; strong companies tend to be domiciled in states that keep them honest with strong insurance laws and requirements. In addition, look for companies that have covered chiropractic malpractice for three years or more so you can get a sense of their stability.
- Consider whether the company has your reputation as the most important factor in this malpractice protection equation. One of the most critical features of any malpractice insurance policy may be the “consent to settle” clause. Companies that don’t include such a clause in the policy can settle a claim against you, even if you believe it’s not justified. Often, it’s less expensive for the insurance company to settle a claim than to go to court. However, the hidden emotional cost of settling unfounded claims is borne by the doctor, whose professional reputation may be tarnished in the process. That’s why it’s to your benefit to have malpractice coverage that contains a “consent-to-settle” clause (if state regulations allow this provision). This clause gives you the opportunity to defend your reputation in court. In other words, the provision means that no case will be settled unless both you, as the insured, and the insurance company agree to do so.
However, there are policies with a consent-to-settle clause that contain a “hammer” in its policy language. Consent-to-settle clauses with a “hammer” may, in effect, coerce an insured to settle the case when, in fact, it is the company that decides to do so. The language of the policy will read something like this, “If the insured refuses to settle the claim and chooses to contest the claim or continue legal proceedings, then the most the insurance company will pay is the amount for which the claim could have been settled plus claims expenses incurred on the day the insured refused to settle.”
- Finally, watch out for arbitration agreements located within the policy. By signing an arbitration agreement between you and your patient, both of you may be giving up your rights to a jury or court trial. Under an arbitration agreement provision, any claim by a patient is presented to an arbitrator for review, and you (and the patient) lose the right to decide whether a claim is settled or tried in court.
There are many factors to consider when buying malpractice insurance. It’s to your benefit to be an informed consumer and find the coverage that fits your needs; to find a company that can provide the best defense attorneys as well as claims handlers who are experienced with chiropractic cases; to find a company that is visible in your profession and knows you and your practice, and to find a company that cares about you and your success.