How will medical malpractice cap impact your premium?
June 2011
During the 2011 General Assembly session, the Medical Society of Virginia (MSV) celebrated the passage of landmark legislation on the medical malpractice cap, finally ending several long years of discussion and negotiation with the Virginia Trial Lawyers Association and the Virginia Hospital and Healthcare Association. This legislation will become law on July 1, 2011 and the first $50,000 adjustment to the cap will take place on July 1, 2012.
The 20-year agreement of scheduled $50,000 annual increases to the current $2 million cap represents an average annual increase of roughly two percent from July 1, 2012 through June 20, 2031. The cap provides many benefits for Virginia physicians, including stability in the medical liability arena, established reasonable limits on malpractice awards, and a sustainable market for liability carriers that will remain competitive in both availability and premium costs. Patients also benefit because they retain access to the broad range of high quality medical care available to them today.
What does this mean for Virginia physicians?
Some physicians wonder how the changes to the medical malpractice cap will impact their professional medical liability insurance rates or if their insurance company will immediately hike up their rates. Actuararial analysis contracted by MSV in 2010 showed that annual premium increases should fall far below 1 percent at 0.3 to 0.4 percent. Conversations with major Virginia carriers support this analysis and they expect the increases in the medical malpractice cap will have a nominal impact on liability insurance premiums.
Some insurance companies have already stated there will be no rate changes for the remainder of 2011. Most insurance companies are increasing a physician’s limit prior to the cap increase going into effect to simplify the process and ensure that the cap change is processed in a correct and compliant manner at renewal time. Some companies are adjusting policy coverage by a $50,000 increase each year and some are doing it in five-year increments of $250,000. Please contact your insurance agent, broker or insurance company for additional information.
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