How Much Insurance is Enough Insurance?
The question “how much insurance is enough insurance” as it pertains to medical professional liability insurance is far more complicated than it used to be. Outside influences such as the legal climate, media exposure and efforts to lower health care expenditures are a few good reasons why health care professionals and facilities should periodically analyze insurance needs and a number of key factors which can impact those needs.
In Kansas, certain health care providers (physicians, hospitals, CRNAs, and others as defined by K.S.A. 40-3401) are required to carry basic coverage. This basic coverage provides $500,000 in coverage per claim and $1,500,000 in annual aggregate limits. Basic coverage is available from insurance carriers who are authorized to write business in Kansas, risk retention groups, and qualified self-funded programs. Defined health care providers are also required to select a layer of coverage from the Health Care Stabilization Fund (HCSF) to supplement basic coverage. Together, these two layers of coverage make up the professional liability coverage for the majority of Kansas health care providers and health care facilities. In Missouri, there is no Health Care Stabilization Fund; therefore most health care professionals purchase $1 million in limit from their insurance carrier.
When concerned with the possibility of facing a claim which could exceed the aforementioned coverage, it is common to consider the purchase of additional insurance, such as excess or umbrella coverage. Such coverage is provided by the purchase of an additional policy. Most companies sell excess coverage in $1,000,000 layers. Each layer will come with a distinct effective date when the policy is issued and a retroactive date, referring to the earliest date that something may occur in order to trigger coverage. Keep in mind that additional insurance cannot be purchased to cover claims already in existence.
How Much is Enough?
For physicians and other individual health care professionals, the decision to purchase additional coverage is a personal one. To evaluate whether the need exists for additional coverage, click on the button below to see a list of possible considerations physicians or individuals should weigh in making their decision.
For hospitals, their corporate culture and environment may play a significant role in deciding whether or not to purchase additional coverage. Additionally, public hospitals may wish to consider the impact of the Kansas Tort Claims Act. See, for instance, K.S.A. 75-6105. To assist hospitals in evaluating interest or need, click the button below to review to access the Hospital Additional Insurance Considerations.
In summary, the best response we have to the question “how much insurance is enough insurance” is to recommend each individual/hospital periodically review the coverage in effect, the risks and risk tolerance through a method similar to the Assessments provided here, then make an informed decision.
Please feel free to contact the KAMMCO Underwriting department at firstname.lastname@example.org or 1.800.232.2259 if you have further questions.