2023 Michigan Doctors Buying Guide to Medical Malpractice Insurance

Doctors in Michigan have several good options for medical liability insurance. The major insurers in the state are:

These companies have proven to provide robust financial and legal support for doctors, and all have an A-rating from A.M. Best. These carriers use proprietary methodologies to set rates and there is no set standard rate across insurers for each specialty. Michigan physicians traditionally bought policies with limits of $200,000/$600,000, but many are now switching over to higher limits of $1,000,000/$4,000,000. Other unique limit structures ranging from $100,000/$400,000 up to $2,000,000/$8,000,000 may be available as needed.

In Michigan, no single carrier dominates the market, with a few carriers insuring the majority of physicians throughout the state. In addition to the competitive market, providers have experienced a steady and consistent decline in claims.

Like many other states, Michigan experienced a rapid increase in claim frequency in the early 1980s. Between 1980 and 1984, medical malpractice insurance premiums doubled and high-risk specialties began to lose practitioners. This crisis spurred the state to pass legislative action, and Michigan’s now stable insurance market can be attributed in part to continuing tort reform, including caps on damages.

Like most states, doctors in Michigan are not required by law to obtain malpractice insurance. However, professional liability insurance will protect a physician from losing their personal assets and practice in the event of a lawsuit, so it is always recommended that providers have coverage.

Even without mandates, most Michigan doctors maintain professional liability insurance. malpractice coverage, since hospitals and other healthcare facilities may still require physicians carry medical malpractice insurance while working in their facility. Historically, Michigan physicians have carried limits of $200,000 per occurrence /$600,000 aggregate, but many are switching to $1 million per occurrence/$4 million aggregate. High-risk specialties like surgery or Obstetrics/Gynecology may need policies with higher liability limits.

Good doctors need to protect against the possibility of a medical malpractice lawsuit, and working with an independent broker to secure comprehensive medical malpractice insurance is fundamental to reducing risk in your practice.

In early March 2020, the Department of Health and Human Services identified the first two cases of COVID-19 in Michigan. On that same day, the Governor issued an executive order declaring a state of emergency across the state of Michigan. On April 1, 2020, the Governor expanded the executive order to declare a state of disaster across the state.

The virus has severely disrupted Michigan’s economy, education systems, and healthcare systems. In October 2020, the Pandemic Health Care Immunity Act was passed in the state. This legislation protects health care providers from malpractice claims arising on or after March 29, 2020 and before July 14, 2020. The act states that providers “are not liable for an injury, including death, by an individual unless it is established that the services amount to willful misconduct, gross negligence, intentional and willful criminal misconduct, or intentional infliction of harm”. Health care providers should keep this in mind in the event that a claim is brought against them during this time period.

In late November 2021, Michigan’s Health Department announced that with Covid-19 hospitalization numbers hovering near all-time highs, the federal government will send doctors, nurses and other healthcare providers to support the state at the Governor’s request.

It remains to be seen if there will be an increase in claims related to the pandemic, as it can take months to years for patients to realize a medical error has occurred. What research does show, however, is that burnout is a major cause of medical errors., and the U.S. has some of the highest rates of healthcare provider burnout around the world. ‘

With COVID-19 placing an enormous amount of stress on an already maxed-out system, it is recommended that any physician practicing medicine in Michigan during the COVID-19 public health emergency be protected by medical malpractice insurance.

The state of Michigan already had telehealth legislation on the docket as of January 2020, but the COVID-19 pandemic increased the urgency for reform. In May 2020, the Governor signed a state of emergency declaration that expanded the rules for telemedicine in the state. All health care providers were authorized and encouraged to use telehealth services if and when medically appropriate and upon obtaining patient consent.

The legislature also passed laws to expand access to virtual health care permanently. As of 2021:

Since physicians are held to the same standard of care regardless of whether they are practicing via telehealth or in-person visits, it is recommended that doctors carry insurance that specifically covers telemedicine.

Premiums in Michigan are high on average, but the specialty and location of the provider can greatly affect medical malpractice rates. Michigan physicians have historically carried limits of $200,000 Each Claim/$600,000 Aggregate, but many are considering higher limits of $1 million each claim/$4 million Aggregate.

See below for approximate rates across all territories for limits of $1,000,000 Each Claim/$3,000,000 Aggregate, which is the average limit across the country. High-risk specialties like surgery or Obstetrics/Gynecology may need policies with higher liability limits. For an individualized quote, make sure to contact an independent medical malpractice insurance broker.

In 1986, Michigan passed its first major tort reform. This legislation required that lawsuits be filed in the county in which the malpractice occurred, mandated a higher standard of expert testimony, capped non-economic damages at $225,000, and addressed issues around joint-and-several liability.

In 1993, continuing tort reform increased the cap on non-economic damages to $280,000, increased standards for expert testimony even further, required that all medical malpractice plaintiffs to file an affidavit of merit, and “permitted binding arbitration for medical malpractice cases that involved damages not in excess of $75,000”.

The state has adjusted its cap on noneconomic damages periodically due to inflation. As of January 2021, the “upper cap” was set at $851,000 and the “lower cap” at $$476,600. For comparison, the 2020 “upper cap” was $842,500 and the “lower cap” was $471,800.

Like many states, Michigan has a cap on non-economic medical malpractice damages, which include factors such as anxiety, depression, pain and suffering, emotional distress, and loss of consortium. In 2021, the state announced that the “upper cap” was adjusted to a limitation of $851,000 and the “lower cap” was adjusted to a limitation of $476,600.

If the medical malpractice resulted in at least one of the following, the upper cap applies:

If none of the above criteria are met, then the lower cap applies to the medical malpractice claim.

There are no caps on economic damages in the state. Economic damages include things like past and future medical bills and expenses, funeral expenses, and lost wages.

The major guidelines regarding the state’s medical malpractice statute of limitation in 2022 are as follows:

Doctors practicing in Michigan that have a claims-made policy but DON’T have Prior Acts insurance (also known as Nose Coverage) need a tail insurance policy to ensure that they’re protected from malpractice claims when changing jobs. Your exposure period begins with your retroactive date (the first date of employment with your last employer) and ends on the policy cancellation date (your last day seeing patients at that job). If a claim is made after your policy expires, tail malpractice insurance will protect you. Often before you begin a new job, your new employer will want to confirm you have tail coverage from your prior job. To get the best rates on tail insurance in Michigan, contact a broker before you notify your employer of your resignation.

When a physician ends their employment, their insurance coverage with that employer also ends. Because most liability policies are underwritten on a claims-made basis, if a claim is filed against you after you leave your employer and your insurance coverage has already ended, you can be exposed to a lawsuit. Tail insurance covers you from your retroactive date up to the last day the policy is in effect – with the ability to report claims years after the last day. Read more about options for tail insurance.

The total medical malpractice payout in Michigan for 2021 was $31,413,000

Like many states, Michigan is facing a physician shortage. Federal data shows there are shortages in 75 of Michigan’s 83 counties. Fortunately, Michigan State University is seeing an increase in applications. In 2020 the medical school reported a 28% increase in applications as compared to 2019, with many people expressing the desire to “dedicate their career to serving marginalized communities and eradicate health care disparities in underserved populations”.

According to the Association of American Medical Colleges, half of the students who have residences in Michigan stay in the state. Perhaps this is because Michigan provides loan repayment incentives to doctors practicing in the state. Under one program, primary care providers working in non-profit clinics in underserved areas can get up to $200,000 in loan repayments. In another, the state partners with medical schools to “increase the number of residency slots for primary care and high-demand specialties in underserved places’ through loan repayment programs.

MEDPLI helps doctors from all specialties. Whether you are a cardiovascular surgeon in Detroit, an anesthesiologist in Grand Rapids, or a radiologist in Sterling Heights, we can help you find medical malpractice insurance. To get coverage from an A-rated carrier, contact us by requesting a quote.