Medical Malpractice insurance is one of the most crucial (and complicated) lines of coverage that healthcare providers purchase. Medical Malpractice insurance carriers issue policies to protect physicians, groups and healthcare facilities in the event that a patient files a claim alleging negligence resulting in injury or harm.

In New York, Medical Malpractice insurance is complicated and expensive for a number of reasons. First, New York is one of only fifteen states that has not yet enacted any kind of tort reform policy which caps economic damage payouts. Meaning, while more than thirty states have capped the dollar amount that can be awarded to a plaintiff for pain and suffering in medical malpractice lawsuits, New York has not.

Second, two insurance companies (both of which are “Admitted Carriers”) have a large portion of the insurance market in New York (leaving little incentive for competitive pricing) and the insurance environment in the state has required government intervention in the past several years. In 2013, the New York State Insurance Superintendent approved a 2 percent medical malpractice rate increase that further drove up the price of premiums offered by New York malpractice insurance companies.

Third, in recent years, New York has had a higher volume of medical malpractice claims and higher payouts than in other states.

As a result, New York medical malpractice insurance premiums are extremely high (as much as 20-50% higher than in other states).

The Good News: recent developments give New York providers more bargaining power and real choices when purchasing Medical Malpractice insurance. Many New York providers now have the option of joining purchasing groups or moving to non-admitted Risk Retention Groups (“RRG’s”) for better insurance coverage at lower costs.