Medical Malpractice Insurance from ProAssurance
ProAssurance is a medical malpractice insurance company, publicly traded on the New York Stock Exchange with the symbol PRA. The company is headquartered in Birmingham, Ala., where it was founded in 1975 as Medical Assurance. In 2001, Medical Assurance acquired Professionals Group and named the merged company ProAssurance. The company’s size makes it a secure and stable malpractice insurer; it is the fourth-largest malpractice insurer in the U.S., with about $4.5 billion in assets and revenue of more than $672 million. ProAssurance writes most of its policies through six subsidiaries: ProAssurance Indemnity Company, ProAssurance Casualty Company, ProAssurance Wisconsin Insurance Company, ProAssurance Specialty Insurance Company, Podiatry Insurance Company of America, and ProAssurance National Capital Insurance Company. The company serves clients in 48 states and the District of Columbia, and does most of its business in the midwestern and southeastern regions of the country. ProAssurance is the market leader in Alabama, Delaware, D.C., Ohio and Wisconsin.
ProAssurance and its subsidiaries have been given the financial strength rating of “A” by Fitch Ratings. A.M. Best rates ProAssurance group “A” (Excellent), and also rates all the other subsidiaries at either “A” or “A-”. The outlook for all ratings is stable, meaning that any change is unlikely in the near future. These high financial strength ratings are based on ProAssurance’s strong reserves, growth and market position. Many physicians prefer to be insured by a highly rated company such as ProAssurance, because the rating offers a measure of security. Insurance companies that are rated poorly or are unrated are more likely to experience financial problems, possibly becoming insolvent and unable to provide coverage of claims. The additional coverage that a physician must buy when he is closing a policy or retiring is called “tail.” This can create a gap in coverage that can make it difficult to obtain other insurance in the future.
Generally, all ProAssurance policies are claims-made. The only exception is in Wisconsin, where the company continues to renew some occurrence policies, though it does not issue new ones. A claims-made policy covers only claims that are filed between the effective date and the expiration date of the policy. An occurrence policy, however, covers all incidents that occur in the policy period, regardless of when the claim is filed. This distinction means that physicians must maintain perpetual coverage if they have a claims-made policy. Even when taking an extended vacation or retiring from practice, a physician must have coverage in place because a claim may be filed regarding an earlier incident. ProAssurance writes policies with limits per occurrence from $250K to over $16 million.(1)
If a medical malpractice insurance policy has a “Consent-to-Settle” clause, the insurance company must obtain the insured physician’s consent before reaching a settlement in a malpractice case. If a policy does not have a consent-to-settle clause, some state laws allow the insurance company to settle the case on behalf of the physician without his or her consent. This can be harmful to the physician, because going to trial might exonerate him or her of blame, but a paid settlement is a negative on a physician’s record. ProAssurance includes a consent-to-settle clause on all its policies, and it is the company’s policy to litigate cases that it sees as frivolous, rather than settling to expedite the process or save money.(2)
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