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| Professional Liability-The Growing Threat and the Need for Protections |
| Countless lessons can be learned from the unfolding of Enron and Anderson, not the least of which regard liability and the associated consequences it can entail. Risk management and insurance for accounting firms has transformed from a mere nuisance (if funded at all,) to a critical factor in ensuring that years of hard work are not sacrificed by a single inadvertent error. The infinite reach of liability has been demonstrated by the Enron ordeal, and most businesses are reacting accordingly. Still, however, many individuals and firms continue to overlook the necessity of a solid risk management program, and, more importantly, a proper professional liability insurance policy. |
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| Take a Close Look at Those Insurance Exclusions |
| The New Jersey professional liability insurance market for accountants has drastically changed in recent months. Insurers that entered the state in the midst of an inflated bond market to capitalize on illusory opportunities are now fleeing. These carriers learned that big profits aren’t generated overnight, especially under New Jersey tort law. Unfortunately, the negative impact on the insurance market continues to linger. |
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| Looking Back on the Medical Malpractice Insurance Market |
| In his state of the union address on January 28, 2003, President George W. Bush called on Congress to pass medical malpractice reform. Exactly one week later, Striking New Jersey physicians gathered in Trenton to protest exorbitant liability insurance premiums. |
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| Claims-Made Malpractice Insurance |
| Medical malpractice insurance companies throughout the nation have experienced significant problems by offering occurrence-based coverage, and have now either ceased offering them, or are simply marketing claims-made policies more aggressively. Although most professional liability policies have historically been written on a claims-made basis, New Jersey carriers began offering occurrence coverage to physicians more than twenty-five years ago, and, until recently, have enjoyed great success. But while the New Jersey tort system continues to shy away from meaningful reform, the inherent difficulties in offering occurrence-based policies have finally been realized. |
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| Medical Malpractice Carriers Prepare for Battle |
| Is New Jersey’s more than four-year-old medical malpractice insurance crisis finally coming to an end? Nationally, companies have observed the medical malpractice insurance industry turn profitable, as a result of both increased rates and some effective tort reform. The profits have already caused competition to heat up, and many companies are relaxing their strict underwriting guidelines, changing the products offered, or even applying new or additional credits to policies to ensure that current business is retained, and new business continues. But before physicians being to celebrate, it is important to analyze the market changes during the past four years, and discuss the potential impact on New Jersey. |
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| Binding Arbitration |
| An age-old concept has recently resurfaced, this time as the “solution” to the medical malpractice insurance problem in New Jersey. Though the concept of binding arbitration may indeed prove effective over time, physicians willing to bet their entire careers today on its success tomorrow should pay close attention. |
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| Advancing Risk Management |
| Avoiding a medical malpractice lawsuit is no longer as simple as making an accurate diagnosis or perfecting a surgical procedure. Much has been written on ways to prevent a lawsuit after a poor outcome, particularly by being honest and apologizing for errors. But what if a practice was able to greatly reduce the probability of a claim before a patient ever sees a physician? |
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| NJ Med Mal |
| The NJ medical malpractice insurance market, though still expensive by comparison to most states, has seen some significant improvement over the past couple of years. More companies are offering medical liability coverage, leading to an increase in competition, and, often, lower premiums. While the short-term relief is much needed for physicians, three disturbing issues are emerging, and may be setting up a whole new crisis if not addressed. |
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| Liquidating MIIX |
| Back in the summer of 2002, MIIX Insurance Company went into voluntary solvent runoff and shortly thereafter ceased writing new medical malpractice insurance policies. This February, nearly five and a half years later, a “Petition for Liquidation of MIIX Insurance Company” was accepted by the Mercer County Superior Court. The petition, in short, advises the court that MIIX has insufficient funds to cover all unsettled claims, and claims should thus be referred to various state guaranty associations. The NJ State Guaranty Association provides $300,000 of coverage per claim. |
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| Deflating the Med Mal Bubble |
| The NJ Department of Banking and Insurance (DOBI) has released two proposals that, if passed, may help the medical malpractice insurance industry avoid its next crisis |
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| Consent to Settle Clauses |
| Most medical malpractice insurance policies in NJ contain a clause that requires a policyholder to first give consent before the company can settle a case on his or her behalf. Waiving this right is now as easy as checking a box on an application, and may even result in a nominal discount, yet many physicians remain unaware of the full implications of this clause. |
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