The Naked Truth Behind Going Bare
Sidenote: Have you considered “going bare” –or without liability insurance? At first glance, it might seem appealing: you would save a lot of money by not having to pay liability insurance premiums and you are a far less attractive malpractice target, as your pockets (and your practice’s) are significantly less deep than your insurance company’s pockets. But, upon closer look, it is almost never worth it. This article addresses several possible situations and scenarios. Highlighted are some of them here. First, keep in mind the obvious: your state, or hospital/facility might require that you carry medical malpractice coverage, so going bare is not an option. Second, some states, like New Jersey, require you to carry a line of credit if you choose to forgo malpractice insurance. In this case, instead of having $1 million in insurance coverage, you are required to have a letter of credit for $500,000. What does this mean? It means you once again have “deep pockets.” And, if you do get sued, you are required to pay all costs, including lawyer fees, expert witness fees, settlements and awards, etc., via this letter of credit. Another option that may be appealing at first glance is a defense-only policy. This policy would pay to defend you in a negligence suit, but it would not provide indemnity if there is a payout. This is hugely risky because a large payout could result in a lien on your assets and the possibility of garnishing your future wages. Read on for more reasons why going bare is rarely a good idea.
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From Medscape Business of Medicine > Your Malpractice Advisor
Your Malpractice Advisor: Could You Do Better By ‘Going Bare’?
Brian S. Kern, Esq
The recent closing of St. Vincent’s Hospital in New York City illustrates the major risks to physicians who get malpractice insurance through their hospitals or large medical groups.