2023 California Doctors Buying Guide to Medical Malpractice Insurance

Malpractice insurance rates for physicians in California are considered moderate. They tend to be higher than in neighboring states but nowhere near the cost of medical malpractice insurance for New York and other states along the east coast. See below for approximate rates across all territories for limits of $1,000,000 Each Claim/$3,000,000 Aggregate (the most common limits of liability in California).

There is no legal requirement in the state of California for most providers to carry medical malpractice insurance – a physician only is required to carry liability insurance in an outpatient surgery setting. How much insurance is needed – just like with any doctor – is based on the risk of the specialty that is being practiced.

Regardless of state law, many California hospitals and health centers require doctors to carry medical malpractice insurance if they want admitting privileges. Liability limits of $1 million per occurrence or claim and $3 million per annual aggregate are the standard policy amounts.

California confirmed its first positive COVID-19 case on January 26, 2020 and declared a state of emergency on March 4, 2020. In what was considered a bold directive at the time, in mid-March Governor Gavin Newsome issued a statewide order asking 39.5 million people to stay at home indefinitely.

Throughout the summer of 2020, recommendations were made to open with restrictions or remain closed based on the business type, county, and rates of positive cases reported. After a steady rise since the first report, positive COVID-19 cases peaked in August and then began to decline through October 2020. While hospitals had reported a PPE shortage initially, the state was able to flatten the curve enough that additional healthcare resources like additional hospitals and ventilators were not considered critical needs.

In December 2020, along with the rest of the country, California experienced a sharp increase in positive cases, with new lockdowns in place for 85% of the state’s residents through the holiday season. ICUs across the state had dropped to below 15% available capacity, and physicians were concerned about the healthcare system’s ability to handle the explosion of patients.

A year later in December 2021, the California Department of Public Health reported 4,845,295 confirmed cumulative cases, the highest number in the US. In addition, the state saw 74,209 deaths, the highest count of deaths related to COVID-19. As of June 15, 2021, California reportedly administered 40,669,793 COVID-19 vaccine doses, the largest number of doses nationwide. However, the slow initial rollout triggered a wide-scale effort to recall Governor Gavin Newsom in 2021.

To be able to respond confidently to the changing needs of patients during the COVID-19 pandemic, California doctors are encouraged to have a comprehensive policy in place from a top-rated medical malpractice insurance carrier.

California was an early leader in creating telemedicine legislation, passing the Telemedicine Development Act of 1996. Despite the head start, the legislation remained unchanged for decades, even though the technology was rapidly evolving.

Spurred by a report from California’s Center for Connected Health Policy, major reforms were approved in 2011 and 2012 which broadened the number of licensed healthcare professionals eligible to provide telehealth services and expanded the range of telehealth services available to patients. Since then, telehealth policy has continued to be amended, and the California Telehealth Policy Coalition hosts an annual legislative briefing at the state Capitol.

Due to the COVID-19 pandemic, on April 3, 2020 Governor Gavin Newsom signed an executive order relaxing state privacy and security laws around telemedicine for healthcare professionals. In addition, the annual legislative briefing occurred on October 5 and focused on telehealth policy in California after COVID-19. Notable changes to the state’s telehealth policy during the COVID-19 state of emergency include:

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.

California was an early leader in tort reform, passing the Medical Injury Compensation Reform Act (MICRA) in 1975. The Act placed a $250,000 cap on non-economic damages in medical malpractice cases. Like many other states across the country, California was experiencing extremely high medical malpractice premiums with insurance carriers threatening to pull out of the state. The legislation was enacted in response to this crisis and served as a model for subsequent states’ legislation on damage caps.

Subsequent tort reform in the state followed throughout the next several decades, including imposing limits on attorney’s fees, imposing shared liability rules (if a patient is found liable for part of their injury, their award of damages is diminished in proportion to their fault), and a new code requiring a patient to notify the healthcare provider of their intent to file a lawsuit at least 90 days before doing so.

In 2014 a proposition to increase the state’s cap on non-economic damages from $250,000 to over $1 million failed by 67%.

The Medical Injury Compensation Reform Act (MICRA) of 1975 placed a $250,000 cap on non-economic damages in medical malpractice cases that is still in place today. Non-economic damages include things like pain and suffering, anxiety, emotional distress, depression, humiliation, and a variety of other non-financial losses.

California has no cap on economic damages. Economic damages are quantifiable and specific monetary losses related to an injury and include things like medical bills (past, present, and future), lost wages, and diminished future earning capacity.

Here are the major guidelines for California’s statute of limitations for medical malpractice claims:

If you are a physician with a claims-made policy practicing in California and you DON’T have Prior Acts insurance (also known as Nose Coverage), having a tail insurance policy will make sure you’re protected from malpractice claims if you change jobs. Tail insurance covers the time between your retroactive date with your former employer, and the last day you are covered by that policy. The dates typically line up with your first day on the job and your last day seeing patients at that job. Before you start with your new employer, the new employer will often want to confirm you have tail coverage from your prior job. To get the best rates on tail insurance in California, contact a broker before you notify your employer of your resignation.

When a doctor leaves an employer, their insurance coverage with that employer ends on the last day of employment. Since most malpractice insurance policies are underwritten on a claims-made basis, you will be exposed to a lawsuit if someone files a claim against you after you leave your employer, without tail coverage. 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 tail malpractice insurance.

The total medical malpractice payout in California for 2022 was $184,773,750.

Overall, California is an attractive option for healthcare providers, especially if you are considering opening a private surgical practice, as the state is known for paying out some of the highest salaries for orthopedic surgeons. In addition to competitive wages, California doctors can also look forward to a large patient population and the legendary beautiful weather.

MEDPLI helps doctors from all specialties. Whether you are an OB/GYN in Los Angeles, an anesthesiologist in San Diego, or a cardiologist in San Jose, we can help you find medical malpractice insurance. To get coverage from an A-rated carrier, contact us by requesting a quote.