Can Private Markets Provide Professional Liability Insurance Coverage?

Abstract

To insure against the financial claims of patients injured while receiving medical treatment, physicians, hospitals, and nursing homes in the United States have traditionally purchased professional liability insurance coverage. The insurance has been sold mainly by commercial carriers operating in the private market seeking to match insurance buyers and sellers. However, the experience of the last 30 years would indicate that insurance provided by private markets may not be a satisfactorily efficient means to compensate victims of medical injury. Given the involvement of state-established insurance mechanisms which seek to support private market coverage, perhaps the private market should be abandoned altogether in favor of public programs which seek to provide funding for compensation of medical injury victims.