Being in the profession of doctor is as difficult as it ever has been. People are constantly questioning what you're doing, they are directing you down paths that they want to pursue rather than first listening to your advice, your income is constantly shrinking, and all of this is occuring while you try to not be sued for malpractice. So what happens if you are sued for Malpractice?
Medical malpractice, otherwise known as professional liability, here in the state of Texas, can be a controversial subject.On the surface, we all know what malpractice insurance covers. If you make a mistake, you can be sued for that mistake or omission. And Malpractice coverage will defend you from a lawsuit and then pay damages on your behalf if a judgement is rendered. But there is controversy around how much liability coverage is enough for a medical malpractice policy in the state of Texas
One of the things that has happened in the state of Texas in 2003 was the passage of tort reform that put a cap on the amount of non economic damages that are awarded to a plaintiff as a result of a judgment in a medical malpractice claim. That means if something was to happen and the doctor was sued for $10,000,000 to make up for pain and suffering, the state of Texas says that there is a $250,000 cap on the amount of damages that can be awarded per plaintiff. Now, what that means for you as a doctor is that if you were to have something happen, the judgment could be awarded for the $10,000,000, but the plaintiff could only recover $250,000 for those non economic damages. The thing that is not highlighted in that scenario is that there is no cap on economic damages.
Because of that, let's say that a patient ends up in the ER. There was something that involved an issue with the spine, and an MRI was determined to be needed. But it was not administered for several hours as the ER became busier and busier. Not having the results of that test then caused the patient to become paralyzed, and now cannot work for the rest of their adult life. Along with losing their income, they now need continuous care as they cannot care for themselves. Lost income and care for long term conditions is classified as economic damages rather. Professional liability insurance, or malpractice insurance as it is called for physicians, would be on the hook for that portion of the judgement as well. In the situation we described, the pain and suffering would be capped at $250,000. But the economic damages would not be capped. What happens next?
Since the plaintiff in this can no longer work because of the paralysis and has the mounting cost of care, the amount of money required to simply live piles up. If that plaintiff is a 45 year old person that is planning to work for another 20 years, the lost wages if you make $100,000 a year is $2,000,000 in total. There is no cap on that amount from the Tort Reform that was passed in 2003. That means when a physician is evaluating how much liability coverage they need for their medical malpractice policy, they need to consider if there will ever be economic damages awarded by a jury or judge in addition the $250,000 that is likely to be obtained from non-economic damages.
Real Life Story
Why are we bringing this issue up? In December, 2022, a judgment was rendered in Collin County when a woman had been taken into an emergency room and had been seen and evaluated. They determined that she needed an MRI because there was blood in her spine. Sadly, that MRI was not done for several hours. As a result of the delay, the woman did not get the treatment that she needed in a timely fashion that would have prevented her subsequent paralysis. It was basically wanton neglect and the jury ended up awarding $4,500,000 in economic damages along with another $5,000,000 in non-economic damages. Since her and her husband were co-plaintiffs on the suit they were awarded $500,000 on the non-economic damage side. This was done because it is $250,000 for each person due to tort reform.
In the end, the judgment total was $5,000,000 when the economic and non-economic damages were added together. Again, the tort reform cap does not apply to economic damages. Therefore, if you're looking at obtaining medical malpractice in the state of Texas and being told that you only need $250,000 or $300,000 of liability coverage because there's a cap on the amount of damages that are awarded, you are flatly being lied to by someone who is trying to sell you something to make a quick buck. A proper evaluation of risk indicates very quickly that saving a few dollars by buying minimal coverage could end up costing you everything in a large loss situation. Don't walk that thin, vanishing line.
What Happens If I Don't Have Enough Coverage?
The good news for you is that wages can't be garnished for a judgment in the state of Texas. Garnishments can only occur for back child support, delinquent student loans, and delinquent taxes. But if you have assets that are in non-qualified accounts such as brokerage accounts or investment properties in your name, you can be forced to liquidate those assets to satisfy a judgement. These are things that a person just trying to get you to buy their malpractice policy is likely not telling you. But it is the reality that you could be faced with in this situation. Unfortunately, it's the reality that's being lived right now because a lady who is now a paraplegic living in a wheelchair and her husband were deemed to have been wronged in that situation. Life can change in the blink of an eye and you certainly don't want to be forced to start saving for retirement all over again because an insurance salesperson just wanted you to buy their policy.
If you are worried about your total cost of risk, rather than the price of a single insurance policy, working with an independent insurance agent with expertise in your risk class can help you evaluate your total risk portfolio. Insurance For Texans can help you see where your pitfalls are today and how to close them. Let our agents look at your total risk environment to help craft a customized plan to keep you from losing everything even if it isn't your fault. Medical Malpractice claims shouldn't mean the end of your financial well-being.