female doctor reviewing unrated medical malpractice insurance carrier on desktop

In my last blog post, I wrote about the dangers of choosing a financially insecure provider for your medical malpractice insurance. Typically, you can find out who these insecure carriers are because of their less than stellar A.M. Best rating.

But did you know some carriers aren’t rated at all? Before I go into why, let’s quickly go over what an A.M. Best rating is.

What is an A.M. Best Rating?

A.M. Best is a rating agency that reviews insurance carriers and appraises them on a scale of A++ to D. A.M. Best looks at a carrier’s:

  • Balance sheet strength

  • Operating performance

  • Business profile, and

  • Enterprise Risk Management

…then provides a rating based on their assessment. A financially strong carrier with a positive outlook will receive an A rating or above, while less superior carriers get a B, C, or D.

Ratings from an unbiased entity like A.M. best are important. Their trained professionals are able to evaluate financial and business criteria then accurately determine if a carrier can provide a financial safety net to its policyholders. A.M. Best is like the FDA of the insurance industry.

Now, there are a couple of reasons why a carrier may not be rated by A.M. Best. One reason is that a company’s small financial size and/or lack of years in business automatically requires it to go through more rigorous vetting. Also, it costs money to apply to be rated. Because of this, some companies opt out of getting rated until they grow or age a bit.

However, some large insurance providers forego getting rated because they know they will receive a bad rating. Capson Physicians Insurance Company – who I mentioned in my last blog post and was placed into liquidation in June 2019 – was an example of a large, well-known insurance provider that was never rated.

When you’re shopping for medical malpractice insurance coverage, make sure you look for an A.M. Best rating; if you can’t find one, this signals a red flag. If you need help finding an A-rated provider, contact MEDPLI by visiting our Contact page or by calling 800-969-1339.