New Jersey Medical Professional Liability Insurance Market Summary
Doctors in New Jersey have multiple options for medical liability insurance. The major insurers are:
- MD Adavantage
What sets these insurers apart from the rest are their high ratings on A.M. Best, their proven ability to successfully defend New Jersey medical providers, and their financial strength.
Historically, providers in the state have experienced major fluctuations in their ability to obtain affordable liability insurance. Doctors witnessed a significant increase in malpractice premiums in the early 2000s, resulting in two insurance companies shutting their doors and two others discontinuing coverage to New Jersey providers. This caused physicians in the state to either stop performing high-risk procedures or leave the state altogether.
Currently, the market is more stable as claims have remained somewhat level and rates are relatively affordable.
Medical Malpractice Insurance Requirements for New Jersey in 2020
New Jersey is one of only seven states that require doctors to maintain a minimum amount of medical malpractice insurance coverage. Visiting doctors are also required by some healthcare facilities to maintain coverage as well.
State legal insurance minimums are set at $1,000,000 per occurrence and $3,000,000 per policy year. Higher coverage amounts are encouraged for higher risk specialties. Renewal coverage must include the premium retroactive date. If not, tail coverage is required. In lieu of tail coverage, doctors can provide a letter of credit for at least $5,000.
Medical Malpractice Insurance and COVID-19 in New Jersey
New Jersey’s response to COVID-19 happened swiftly and early, due in part to collaboration with its hard-hit neighbor, New York. The first positive case was confirmed in early March 2020, and five days later Governor Phil Murphy had declared a state of emergency, with a statewide stay at home order announced eleven days after that.
Even before the first case, Governor Murphy launched a COVID-19 task force with the state Health Commissioner to coordinate state efforts to prepare for the public health hazard posed by the virus. Despite these efforts, cases in New Jersey surged, and the state experienced its peak in positive cases around mid-April, going as far as bringing in health care workers from other states to help manage the high number of positive cases. By June 9th, however, the statewide stay at home order was formally rescinded, and restrictions have loosened even further since September 2020.
The state is now preparing for a second wave. Residents can utilize the state-approved app COVID Alert NJ to track the latest statistics related to the virus. The app can warn users when they’ve come into contact with someone who has tested positive for COVID-19, and when to contact their health care professional.
Make sure you’re ready to meet your patients’ ever-changing healthcare needs by contacting MEDPLI to provide you with the best medical malpractice insurance rates.
Telemedicine in New Jersey
New Jersey has been at the forefront of telemedicine in the United States. In July 2017 then-Governor Chris Christie signed a law into effect to allow doctors to see patients virtually with no requirements for initial in-person appointments. The original law required all providers to register annually with the state Department of Health and submit annual reports on key measures such as diagnostic codes, source of payment for consults, and demographics like race and ethnicity.
With the increase in demand for telehealth services due to high numbers of COVID patients in the state, Governor Phil Murphy signed two bills into law in March 2020, expanding public access to virtual medical care even further. Notable changes to the existing laws included:
- Doctors were no longer required to review medical records to help establish a patient relationship before telehealth encounters if the records were not readily available
- Site of Service requirements were waived, allowing patients and providers to engage in telemedicine services from any location
- Restrictions were lifted on the type of technology that could be used to provide medical services, including the use of devices that lacked video capabilities
- Any health care provider that held a valid license in another state was permitted to provide telemedicine service in New Jersey provided that the care was COVID-19 related.
Lawmakers say they will use this time to study the long-term effects of expanding telehealth services and use this information to guide future regulations.
The following day saw the addition of a new law, requiring New Jersey Medicaid and commercial insurers to provide coverage for telehealth services without cost-sharing during the COVID-19 public health emergency.
Since doctors have the same liability with telemedicine visits with patients as they do with face to face visits, it is recommended that doctors carry insurance that specifically covers telemedicine.
Malpractice Insurance Rates for New Jersey Doctors
Medical malpractice insurance rates in New Jersey tend to be some of the highest in the country due to the state’s history, frequency, and severity of malpractice claims. However, carriers look at various factors when determining rates like location, specialty, and the doctor’s claims history. The only way to know what rates you’ll be given – and to know you’ve gotten the best rate – is to work with an insurance broker who knows how to shop the market for you.
State filed rates from 2016
Tort Reform in New Jersey
New Jersey law states that any medical care individual or entity can be held liable for medical negligence if they are licensed to provide medical services.
The state follows a comparative fault 51% rule where a claimant is only able to recover damages for an injury if a court determines that their apportionment of fault for their injury is 50% or less.
In addition, medical malpractice claims require a follow up “affidavit of merit”, where an appropriately licensed person must declare under oath that the defendant did not meet the appropriate medical standard of care under the circumstances. This must be filed within 60 days of the defendant responding to the claim, and separate affidavits need to be prepared for each health care provider being sued. Failure to follow these mandates may result in the case being dismissed.
New Jersey’s Damage Caps on Medical Malpractice Lawsuits
Currently, there are no caps on economic or non-economic damages in medical malpractice cases in New Jersey.
In any injury case, punitive damages are limited to $350,000 or five times the amount of compensatory damages, whichever is greater. However, punitive damages are rare partly because they require proof that the defendant acted with “actual malice” or a “wanton and willful disregard” toward injury.
Statute of Limitations for Medical Malpractice Claims
Statute of Limitations laws for New Jersey say:
- Medical malpractice suits must be filed within two years of the date of the injury
- If the injury could not have been reasonably discovered within that two year period, the statute of limitations will not begin to run until discovery
- Birth-related medical malpractice claims must commence prior to a minor’s 13th birthday
- If a patient was a minor at the time of injury, they have until age 18 to file suit
- If a minor died as a result of medical malpractice, the claim must be filed within two years
Tail Insurance in New Jersey
If you are a physician practicing in New Jersey with a claims-made policy and you DON’T have Prior Acts insurance (also known as Nose Coverage), having a tail insurance policy will ensure you’re protected if you change jobs. Tail insurance covers the gap between your retroactive date with your former employer to your start date with your new employer. To get the best rates on tail insurance in New Jersey, contact a broker before you notify your employer of your resignation.
When and why is tail insurance necessary?
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.
Medical Malpractice Insurance Outcomes in New Jersey for 2019
The total medical malpractice payout in New Jersey for 2019 was $130,758,500.
Because of a historically high rate of medical malpractice insurance claims, high premiums, and low wages compared to the surrounding states, medical professionals are desperately needed in New Jersey.
Legislation such as the 2004 Medical Care Access and Responsibility and Patients First Act increased enrollment at medical schools located in the state, and the improvement of the competitive medical malpractice insurance marketplace have all begun to stabilize premiums and help New Jersey retain physicians.
If you’re a health care professional looking for medical malpractice insurance, request a quote from MEDPLI. From a family physician in Hackensack to an OB/GYN in Newark, we can help you find the most affordable coverage in New Jersey.