California Medical Malpractice Insurance

California Medical Malpractice Insurance Coverage

Coverage Requirements

In the State of California, medical malpractice insurance coverage is not required of physicians by the state --although many hospitals and facilities require it to obtain admitting privileges and many health insurance companies require it to participate in their plans.  And, most practitioners prefer to get coverage in the event that they might face a claim --so they don't have to pay out of pocket and/or so they can have an advocate to help them navigate the process.   

The most common limits of coverage in California are $1 million per claim/$3 million aggregate.  This means that healthcare providers typiccally purchase medical malpractice insurance with coverage up to $1 million per claim, and $3 million aggregate.  “Aggregate” means that the policy will pay out up to a total of $3 million  in one policy year. 

What is the Med Mal Climate Like in California?

To the good news of California health care providers, California was one of the first states that passed medical malpractice tort reform.  The bill was called the Medical Injury Compensation Reform Act of 1975 (also known as MICRA).  And, it has long been considered the gold standard of medical liability reform.  That said, for the first time in nearly 50 years, MICRA just increased the state’s limit on noneconomic damages –and they will no longer be capped at $250,000. 

Starting in January of 2023, according to the American Medical Association:

• If the case does not involve a patient death, there will be a limit of $350,000 on noneconomic damages –with an incremental increase over the next 10 years to $750,000. And, there will be a 2% annual adjustment for inflation after that.
• If the case does involve a patient death, the noneconomic damages limit will be $500,000 –with an incremental increase over the next 10 years to $1 million. And, there will be a 2% annual adjustment for inflation after that.

Despite the upcoming increases in the damage caps, California is still considered a favorable state for physicians to practice in. 

What Kind of Coverage is Available in California?

Both Claims-Made and Occurrence-type coverage policies are available in the state.  And there’s a third, additional type of policy available from one carrier, this is a Claims-Paid type policy.  A claims-paid type policy is similar to a claims-made policy, except if there is an open claim, and the provider decides they want to shop for new, cheaper coverage, they would be forced to take over responsibility for any open claim(s), and pay all of the damages should they materialize, after changing policies.  Thus, it is extremely  important to know that if you’re shopping for this type of coverage, to know the pros and cons of this type of policy, especially if you’re in a high risk situation.  Generally speaking, this type of policy is only good for people without claims and who have low risk.  It is also important to know that, again like a claims-made policy, you would still have to get a tail and that there are step-rate premium increases from year one to year four or five. 

Who Can We Get You Malpractice Insurance Coverage with in the State of California?

As an agency, we have access to all of the major carriers in California, including various surplus lines/non-admitted companies.     

Cost of Malpractice Insurance

Overall, California is a great state to do business in due to its tort reform, large population, and high GDP.  And, there are many high population centers with diverse real estate options to set up practices.  Thus, while the overall cost of California medical malpractice insurance coverage is high, it is not the worst state to be in.  The most expensive counties in California are Los Angeles, Riverside, and Contra Costa. 

In general, rates in California for a first year, claims-made medical malpractice insurance policy, for an internal medicine physician who is claim free, can range from $3,500-$5,500/year, depending on the location.   

How to Lower the Cost of Your Medical Malpractice Insurance Coverage

Please know that you may qualify for discounts.  Often, we can offer discounts for being New to Practice, Claim Free, and/or having recently completed qualifying risk management CMEs, among others.       

How Can We Help You and Why Should You Choose Us?

Nexus Insurance Services was established in 2004, and is a full-service California medical malpractice insurance broker.  As a broker, we can shop the market on your behalf, reaching out to multiple insurance companies simultaneously, providing you with a wide array of options and the ability to get you the most competitive pricing.  Also, we specialize in California medical malpractice insurance and provide coverage for both individual medical providers and practices of all sizes. 

Finally, in addition to providing medical malpractice insurance, we can also provide general liability and cyber liability coverage for your practice, should you need it, too. 

Do you need med mal coverage in California?  If so, click here to request a free quote. 

Additional Resources:

Glossary

California Department of Insurance

California Medical Association