On February 11, 2019, Capson Physician Insurance Company was placed into rehabilitation by the State of Texas. At one time an up-and-coming star of the medical malpractice insurance industry, three years of operating losses and dwindling capital forced regulators to intervene. On the outset, Capson seemed like a thriving company, but by June 2019, it was placed into liquidation, sending its policyholders scrambling to find malpractice coverage from other carriers.
Many were surprised by Capson’s intervention since its strategy and marketing tactics had seemed ambitious and confident. When the company went under, it put policyholders at risk in many ways.
How so?
1. Inability to get paid – if Capson’s doctor clients were unable to demonstrate proof they carried the minimum required malpractice coverage mandated by the state, payers (the health insurance companies) wouldn’t pay submitted claims.
2. Inability to work – healthcare facilities require proof of medical malpractice insurance from their practicing physicians. If a Capson client couldn’t provide it, they would have been forbidden to work.
It’s even worse if Capson’s policyholders had an open claim when they went into receivership. Why?
1. Claims won’t be covered or defended – if your carrier goes under, they won’t be able to defend you in the event of a lawsuit, nor pay damages. A verdict against you would end up in the National Practitioner Data Bank, further complicating your ability to become insured.
2. Difficulty finding a new carrier – open claims make you seem like a liability. Many insurers will refuse to insure you, and any willing to take you as a client will inevitably charge more.
These reasons are why it’s important to make sure your medical malpractice insurance provider is financially robust and, in some cases, admitted to the state’s Property & Casualty Insurance Guarantee Fund.
To learn more about the importance of carrier financial stability or find an A-rated, financially robust insurance provider, contact MEDPLI from our Contact page or at 800-969-1339.
