How to Choose a Carrier

Medical liability insurance companies - and the policies they offer - can differ significantly. Here are some important questions to ask when choosing a carrier:

1. How long has the company been in business?

A new company may have limited data on the loss experience of Texas physicians. This could lead to an inaccurate projection of future liabilities, and could ultimately affect financial stability. TMLT has been in business for more than 25 years, and has closed more than 38,000 medical malpractice claims.

2. How experienced is the company’s top management, including the claims staff?

TMLT is managed by experienced professionals who understand medical malpractice in Texas. TMLT claim supervisors average 15 years of medical malpractice claim experience; claim executive staff averages 25 years of experience.

3. How many policyholders does the company have in Texas?

The number of Texas policyholders will indicate the company’s commitment to the state and their experience with the Texas legal environment. TMLT, located in Austin, Texas, is currently the largest medical liability provider in the state. We protect more than 13,800 physicians.

4. Identify the defense attorneys the company uses for policyholder defense.

The company should work with reputable attorneys who have extensive experience in medical malpractice litigation, and a history of success in the courtroom. TMLT retains law firms in Texas with a proven record of success in medical liability litigation. We consistently close more than 85 percent of claims with no indemnity payment, and we win 90 percent of claims that reach the courtroom.

5. Request a financial statement or annual report to evaluate the financial stability of the company.

TMLT’s latest annual report is available at www.tmlt.org. You can also request a copy by contacting the marketing department at (800) 580-8658 or send email to sales@tmlt.org

6. What are the company’s assets?

An insurance company needs to accumulate assets because it has promised to pay substantial amounts in the future. This information is available in a company’s annual report. TMLT’s assets for 2005 were $588.7 million.

7. What is the company’s policyholder surplus?

A company must build sufficient surplus to assure that losses, in excess of the premium collected, can be paid. At a minimum, the carrier should have no less than one dollar in surplus for every three dollars in premium collected each year. TMLT’s policyholder surplus was $203 million in 2005.

8. Does the company offer discounts or other types of incentives for physicians with a good claims record?

TMLT offers discounts to policyholders with favorable loss experience. The discounts range from 5 to 20 percent, relative to how long the physician has been insured by TMLT. Policyholders can also earn premium discounts by participating in TMLT’s risk management programs.

9. Does the policy include a “consent to settle” clause?

When an insurance carrier has investigated a claim and deems it necessary to settle the claim, do they ask the policyholder’s consent? Can they settle the claim without that consent? The TMLT professional liability policy says “the Trust shall not settle any claim or lawsuit without first obtaining the consent of the Named Insured.” Not all medical liability companies include such a provision in their policies. Some are silent on the issue, while others stipulate that they retain the power to settle a claim.

10. Be sure you understand the policy exclusions.

Different companies exclude different procedures or types of procedures from coverage. Some companies exclude coverage for treatments that are outside the physician’s specialty. Other companies may name specific procedures, such as surgery to treat obesity, that are not covered. If a lawsuit is filed in relation to an excluded procedure, there will be no coverage for the suit. All medical liability policies have exclusions; it’s important to know what they are.