Loss-Run Requirement Reduced to Seven Years

This blog post was written by Norcal Mutual

The norm for the industry’s medical malpractice insurance underwriting is to ask for ten years claims experience. This is especially important for malpractice insurance for OB’s or malpractice insurance for surgeons. Norcal has changed this rule, and it is now seven years for all MD’s who apply. Here is their announcement:

Traditionally, NORCAL Mutual has required a ten-year loss run for new business applicants. In response to changes in the marketplace, along with our desire to be more flexible in our underwriting, we have reduced this requirement to seven years.

Loss runs should be valued within the past ninety days, and should identify all claims that were made during the seven-year time period, including those that had defense costs only, and those that had indemnity and defense costs.

For a physician, the loss run should be for the previous seven years, or since the date the physician began practicing; whichever is more recent. For a medical group, hospital, or facility, it should be for the past seven years, or since the date the entity began its operations; whichever is more recent.

Loss runs for medical groups, hospitals, and facilities should include losses for all risks on the policy (e.g., physicians who are insured under a group policy).

Although no longer required, a ten-year loss run may still be a good idea for large account submissions such as hospitals, large facilities, or physician groups with twenty or more physician members. A longer loss run sometimes allows our experience rating model to function with increased credibility, which may in turn enable the underwriter to provide additional discounts in the quote.

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HCP National is a certified MBE & WBENC Insurance Brokerage.
Request a quote now and see how much you can save!