Which limits of liability physicians choose for their malpractice coverage is extremely important. In making the decision, physicians need to know:

• What are their choices?
• How much coverage do they need?
• Are their policy limits high enough?

Surprisingly, many physicians who have malpractice coverage don't even know how much they're insured for. If you are currently insured by SCPIE, your coverage limits are noted on the declaration page of your policy.

Policy Limit Options
One of the primary reasons that physicians need professional liability insurance is to protect their personal assets in the event of a claim and subsequent settlement or award.

To receive adequate protection, it's important to carefully select the proper coverages and limits of liability.

SCPIE offers three basic policy limit options:

• $1,000,000/$3,000,000
• $2,000,000/$4,000,000
• $5,000,000/$5,000,000.

In each of the above options, the figure on the left is the maximum SCPIE will pay for a settlement or an award for a single claim; the figure on the right is the maximum SCPIE will pay for all claims in a given calendar year. Fortunately, when you are insured by SCPIE, coverage of defense costs is unlimited and does not reduce the liability coverage limit—which is not the case with all insurance carriers.

The truth is, choosing policy limits means making an educated guess—and as with most things in life, you get what you pay for. Selecting limits that are too low could jeopardize your personal assets, as well as the assets of colleagues with whom you practice.

That's why some specialists—particularly those who regularly perform high-risk procedures (e.g., obstetricians)—may be more inclined to choose higher limits of coverage. But even for physicians who practice in lower-risk specialties, the potential for being subject to high liability awards, while less likely, still exists. Indeed, some of SCPIE's largest settlements have been paid on behalf of insureds in lower-rated classes.

Selecting higher limits enables you to practice medicine with minimum concern about the adequacy of your protection. One hazard of selecting lower limits relates to the amount of leeway physicians have in fighting lawsuits. Physicians facing potential awards that exceed their liability limits are more apt to settle cases even if they were not medically negligent, out of fear that their personal assets may be in jeopardy. Unfortunately, when physicians settle defensible, nonmeritorious cases because of less-than-adequate limits, their professional reputations may be damaged in the process.

Decisions about limits of liability should not be based solely on price; often, substantially greater limits can be obtained for a relatively small percentage increase in premium.

A general guideline for deciding which limit to choose: Consider the risk exposure of your practice, and balance that against which limit of liability you can reasonably afford.

Whichever limits you select, it is prudent to review your coverage on an annual basis. (For example, increased patient loads sometimes necessitate higher limits; the converse is not always true, however.) Questions to ask when reviewing the adequacy of coverage: Are the limits appropriate to my specialty and the risk exposure my practice represents? Am I jeopardizing my associates by having my current coverage limits?

If you're uncertain about which limits of liability are best for you, do some investigating. Helpful sources include colleagues, hospital administrators, medical group managers and defense attorneys. And, of course, a SCPIE broker or the professionals at SCPIE can provide invaluable input in helping you make your decision.