Ohio Medical Malpractice Insurance

The Basics

• 3 companies comprise 58% of the market.
• Number of Physicians: 32,411.
• Total claims closed in 2012: 2,773.
  • Authorized Insurers: 1,542.
  • Self-Insured Entities: 1,020.
  • Risk Retention Groups: 43.
• Percent of claims resulting in no payment to a claimant: 79%.
• Indemnity Payments: $177,323,025.
• ALAE Payments: $69,727,192.

Tort Reform

Ohio Senate Bill 281 in 2003, followed by SB 80 in 2004-2005 brought caps on non-economic damages to Ohio. Under Ohio law non-economic damage awards are capped at the greater of $250,000 or three times the amount of economic damages, not to exceed $350,000 per plaintiff and $500,000 per incident. The exception to this is in the case of catastrophic injury, defined as, (a) permanent and substantial physical deformity, (b) loss of use of a limb, (c) loss of bodily organ systems, (d) permanent physical functional injury that prevents the injured person from being able to independently care for themself and perform life-sustaining activities. In these cases non-economic damages may not exceed $500,000 per plaintiff and $1,000,000 per occurrence.

Additionally, punitive damages are limited to two times the amount of compensatory damages, or in the case of a small business or individual the lesser of that number or 10% of the defendant’s net worth, not to exceed $350,000.

Statute of Limitations

The Ohio Statute of Limitations is fairly simple in its general outline, but there are some caveats that can make its application slightly complex. In general, a patient has one year from (1) the date the alleged malpractice was committed, (2) the date they discovered the injury from the alleged malpractice or reasonably should have, or (3) the last date on which the doctor treated the patient for the condition, whichever of these is the latest. Further, spouses or next of kin have two years from the date of death or the date they discover, or should reasonably have discovered, that their spouse or relative was a victim of wrongful death to file suit.

What about those caveats though? Here they are:

• Plaintiffs may give a notice of intent to file a lawsuit to the doctor within the allotted year, often called a 180-day letter, which then allows them 180 days from the date of delivery to file suit.
• In the case of a minor, the one year time period does not begin until his or her 18th birthday.
• Ohio also has a Statute of Repose that effectively bars any malpractice claim from being brought more than four years from the date of the incident.

Liability Limits

Ohio, like most states, does not have legally mandated minimum limits of liability coverage a doctor must carry. However, with non-economic damage awards that can be as much as $500,000 in addition to compensatory damages and punitive damages, it is advisable for most doctors to have standard $1M/$3M coverage limits.

Summary of the Ohio Medical Malpractice Insurance Market

Ohio’s medical malpractice market is in a much better place than it was a decade ago. Since major tort reform went into effect in 2005 the number of closed malpractice claims per year has dropped nearly in half according to the most recent data. The same is true of total indemnity payouts and allocated loss adjustment expenses (ALAE), (i.e. money spent defending against claims). While the percentage of claims that result in payouts has remained fairly steady, as has average indemnity payments and ALAE per case, the likelihood of being sued in the first place is much lower than it was prior to tort reform. If there is any concern about the market in Ohio it probably centers on the concentration of the market. Ideally more competitors in the market would tend to work against a situation like we see now with three providers accounting for nearly 60% of the market. However, this isn’t an extreme situation, and there is reason to think that other providers will be eager to participate in such a stable and positively trending market.