Texas is one of the states that practice a mild malpractice system compared to other states. However, it is still vital for you to have malpractice insurance to protect your profession and job itself. It is a good investment that keeps you professionally and civil secured. For the record, Texas has more than 60,000 medical malpractice petitions for the past few years.
There are different types of malpractice insurance in Texas. In this article, you will understand the processes of Texas Medical Malpractice Insurance. It is essential, especially if you are in the medical field or providing medical advice. Every time you interact with a patient or impact the health care with your decision, you are severely at risk for a malpractice claim. It is not something that you can slide, and it would be best if you are protected with Texas medical malpractice insurance.
Texas Malpractice Insurance Overview
The state of Texas passed a reform in 2003 on reducing the fine for medical malpractices. Another prime aim of the reform is the reduction of the cost of insurance. As a result, the malpractice claims are reduced. It also established a cap that determines the minimum and maximum amount the complainant can receive. Given these circumstances, it is still stressful, time-consuming, and expensive on the part of the medical professional.
Texas medical malpractice insurance is not a requirement before. And it creates a great impact because professionals practice their profession without any protection. This process is often known as going bare. It is not a good strategy because a single claim can cause millions of dollars. It might even cause you years to pay.
If you are a medical professional in Texas, getting professional liability insurance is a must need. And if you are thinking of buying medical liability insurance, doing your own research is essential. Know first your risks and things that you need to protect before you make a decision. It is also important to shop for a quote to ensure that all your insurance companies will protect your needs at all costs.
Note that the more extensive your medical malpractice insurance, the more protected you are. You can also gain some benefit from your direct relationship with your provider. You feel like you belong and experience a wholesome experience. If you want to know more about medical malpractice insurance, here are the things that you need to know.
What is Medical Malpractice Insurance
Medical malpractice insurance is also known as medical liability insurance. It aims to cover all financial responsibilities and obligations medical professional faces caused by the errors and negligence they have caused in practicing their profession.
Medical malpractice insurance policies help you pay the legal cost and financially cover the errors and negligence of service. The good thing about this is you are protected even if the accusations against you are groundless and false. But, note that you are not covered if the act is intentional and results in criminal liabilities.
What Types of Insurers Offers Medical Liability Insurance
There are four different types of insurance assessed by the Texas Department of Insurance. They provide insurance to health care professionals in Texas and ensure that they are protected and secured.
Make sure that you check the insurance carrier before closing a deal. As much as possible, make sure that they comply with the protocol of the Department of Insurance if you happen to be a victim of unauthorized insurers that do not have any license to operate in Texas. The state can practice consumer protection laws.
It would be great if you will check the legal standing of your insurance carrier. It will help you be secured and protected. Here are the things that you need to put in mind in choosing an insurance provider in Texas.
Licensed Insurance Companies
The Texas Department of Insurance (TDI) regulates the rates and the policy forms of the licensed medical liability insurance providers. The following are the medical liability policies mandated by the law, so every insurance provider offers these provisions.
- The insurance company cannot cancel or decline the insurance coverage after 90 days of the effectivity of the insurance policy;
- 90 days minimum notice of the premium increase or the insurance renewal. It should be equipped with a written explanation for the said action; and
- There is no surcharge or extra fees for the claims.
Again pay attention to the policies offered by your licensed insurers. They should not implement restrictive provisions that are against the claims and public policies. You should also choose and have a run-off coverage because it protects you if the insurance company was closed or ceased its operations.
People who have malpractice insurance from licensed independent providers are secured by the Texas Property and Casualty Insurance Association; you are entitled to $300,000 for every claim if you became insolvent. It would be best if you will also check the group policies available in the insurers.
The following are also legislative entities that provide medical malpractice insurance in Texas.
Texas Medical Liability Insurance Underwriting Association (Texas JUA)
It was established in 1975 to ensure that medical practitioners and health care providers can obtain their insurance in the market, regardless of their condition.
The Texas Department of Insurance regulates the policies available as well as the policy rates of JUA. Note that JUA is not part of any association, but they are properly assessed to maintain and manage its solvency.
Texas Medical Liability Trust (TMLT)
It was established and upon the provisions of the 1977 statute that authorizes and manages the association of physicians and medical practitioners. It aims to build trust and allow its member to be insured. It is the main purpose of the TMLT. The Texas Medical Liability Trust is only limited to its members. It means that you can only have your insurance policy if you are part of the founding association.
Medical Professional Liability Funds
The Education Code of Texas allows the establishment of separate and unique self-funded policies to cover and secure a professional liability of physicians, medical staff, or medical students in specific institutions. The educational institutions covered are the following:
- Texas A & M University System;
- University of Texas System;
- University of North Texas Health Science Center; and
- Texas Tech University Health Sciences Center
Given this, know that the funds under Medical Professional Liability are not subject to the Insurance Code, and the Texas Department of Insurance is not regulated. The guaranteed association is not also a requirement in Medical Professional Liability, so it would be best if you will contact the persons in charge in your university.
Surplus Lines Insurers
Licensed insurers sometimes cannot provide enough insurance, so one of the resorts is to have surplus line insurers. One thing to bear in mind is that these insurers must obtain their license in their state or home country to be eligible to sell insurance in Texas. They must pass and be on the TDI’s allowed list to legally conduct business in Texas. To be safe and secure, you must get surplus lines insurance from the licensed TDI providers. It also takes so much effort to have the authority to sell surplus lines policy, and each agent must have the effort in looking for a licensed insurer for a policy.
Here are the things that you must know about surplus lines insurers:
- Retaining a portion of the insurance premium is common for surplus line insurers. It is one of the ways to protect themselves in case the insured cancels their policy midway.
- The Texas laws about premium increases, cancellation, and even renewal do not apply to these insurers.
- The defense or lawsuit cost is included within your limit of liability. But, the tail and nose policy is not applicable for these insurers.
- The surplus lines insurers have their freedom to cancel a policy before the renewal date.
- Surplus lines policies and rates are not regulated, and it can be more restrictive.
- The Texas Department of Insurance (TDI) does not audit Surplus Lines insurers’ finances or financial transactions.
- There is also no guaranteed protection in case the surplus lines insurance became insolvent.
Risk Retention Groups and Risk Purchasing
The Risk purchasing groups are created under the provisions of the Federal Liability Risk Retention Act of 1986. The group is composed of firms or individuals who share the same characteristics for insurance needs. The criteria to be part of the group were stated in the Act. Once the group was registered and approved in Texas, the group can now exercise its rights and power to obtain medical malpractice insurance. The good thing about this is it is much lower than other businesses and individuals who are availing of the said policy.
If the purchasing group avails insurance from a licensed and legitimate insurer, they are eligible and guaranteed association protection, especially if they have capital and surplus of more than $25 million for the policy issue. If the group is not covered with association protection, the insurance will be disclosed to its members.
Insurance companies that provide coverage to their members using the purchasing group should file policy rates and forms to TDI. They must comply with the rates and policies of the state.
Risk Retention Groups are also part of creating the federal Liability Risk Retention Act in providing and issuing an insurance policy. To be acknowledged in Texas, the risk retention group must be a licensed insurance company. Also, for the note, these group does not buy commercial insurance; instead, they retain the risks within the group. It means that each member makes sure that they are protected from any lawsuits and liability claims. However, given that they also have a risk retention group, they need to have reinsurance. It is a form of insurance policy that most companies buy to minimize their risks and spread the potential losses for years.
Note that the insurance rates and policy are not regulated, and the groups are not under guaranty association.
Texas Tort Reform
Texas tort reform in Texas focuses on providing security to physicians and medical professionals. To summarize, you are entitled to a $250,000 non-economic damage cap for the healthcare providers and doctors. If there is a wrongful death action that occurred while practicing your profession, you are entitled to a $500,000 limit. The limits is also flexible depending on the inflation.
Occurrence Policies and Claims Made
This insurance policy helps you cover the claims that arise from the policies that were made by force. It is regardless of what kind of method was used.
On the other hand, your claims-made policy covers the claims that occurred during your policy term, and it is only provided when the event was within the policy limit. You will also be given a retroactive date specified in your insurance policy, aside from its original effectivity date.
One thing to bear in mind under the claims policy is the date where the claims were made. If it exceeds for a year, you will not be entitled to a claim anymore unless you did not stop your policy and it continues protecting you and your profession. But, if it fails to do so, a run-off coverage is a must to cover the residual claims against you. Another consideration is its price; claims made policies are much affordable than occurrence policies because the claims build slowly as it accumulates when you are practicing your profession.
Texas Department of Insurance
If you are having problems with your insurance policy, insurance companies must answer your queries and concern. You can call your agents for that matter. You can also contact the TDI through telephone lines, email, and the website. Just follow the procedure and wait for your complaint to be addressed. Make sure to check what form you are using, there is a Physician/Clinic/Provider Complaint form and include your professional liability concern.
Texas is known as one of the promising leaders when it comes to medical liability tort reform. State laws protect Texas physicians and medical professionals. It aims to build a healthcare-friendly system by making sure that medical malpractice insurance is affordable. The malpractice insurance rates are beyond the capabilities of Texas physicians.