Insurance Insiders Weekly Brief: Significant Awards Highlight Ongoing Risks

Dear agents, 

Welcome to your weekly update on the medical malpractice insurance landscape. This briefing covers carrier trends, notable verdicts, and recent legislative developments, providing insights to assist you in client renewals, prospecting new business, and strengthening your portfolio.

📈 Carrier Trends: Market Hardening Intensifies Amid Rising Verdicts and Capacity Constraints

The medical malpractice insurance market is experiencing intensified hardening in 2025, driven by escalating claim severity, increased litigation, and capacity constraints.

Escalating Premiums Across the Board

Premium rates are projected to rise between 5% and 20% this year, with higher increases anticipated in states with litigious environments and for high-risk specialties such as neurosurgery, obstetrics/gynecology, and bariatric surgery . The prevalence of "nuclear" verdicts—jury awards exceeding $10 million—has surged, with the average of the top 50 malpractice verdicts increasing by 50% in 2023 to $48 million from $32 million in 2022. flowspecialty.com | MedicalEconomics

Capacity Constraints and Underwriting Scrutiny

Insurers are responding to these challenges by reducing capacity, particularly in excess layers, and implementing stricter underwriting guidelines. Some carriers are limiting total coverage to $5 million per layer in excess towers and increasing attachment points for underlying coverages . Additionally, there has been a notable increase in non-renewals and limit reductions from admitted markets, especially affecting human services organizations.Ryan Specialty Blog

Alternative Coverage Models and Risk Management Emphasis

In response to the hardening market, healthcare providers are exploring alternative coverage models such as captive insurance arrangements and risk retention groups (RRGs), particularly among larger practices and hospital systems . Insurers are also leveraging advanced analytics and artificial intelligence to refine underwriting processes, placing greater emphasis on providers' claims histories and risk management practices. Providers with robust safety protocols may benefit from more favorable rates and terms .

⚖️ Notable Verdicts: Significant Awards Highlight Ongoing Risks

$48.1 Million Verdict in Missouri

A St. Louis jury awarded $48.1 million to a family after their son suffered severe brain damage due to alleged negligence during childbirth at Mercy Hospital. The verdict underscores the potential financial exposure in obstetric malpractice cases. Firstalert4.com

$16 Million Verdict in South Carolina

In Spartanburg County, a jury awarded $16 million in a case involving the death of an infant. The case highlights the importance of thorough prenatal care and monitoring . McGowan, Hood, Felder & Phillips, LLC

Implications for Healthcare Providers:

• Enhanced Coverage: Ensure clients have robust coverage, especially those in high-risk specialties.
• Policy Review: Reassess policy limits and exclusions to account for potential high-value claims.

🏛️ Legislative Update: Georgia Enacts Tort Reform Measures

On April 21, 2025, Georgia Governor Brian Kemp signed into law new legislation aimed at limiting lawsuit damage awards for medical malpractice and property liability cases. The reforms are intended to bring balance to the state's legal environment and provide relief to businesses . Georgia Recorder

Considerations for Agents:

• Policy Adjustments: Review and adjust policies to accommodate the new legal standards, particularly concerning damage awards.
• Client Communication: Inform clients about the legislative changes and advise on best practices to mitigate potential liabilities under the new law.
  
  

🔑 Key Takeaways for Agents

• Renewal Strategies: Anticipate rate increases and begin renewal discussions early, utilizing detailed loss data to negotiate competitive terms.
• Carrier Engagement: Emphasize clients' proactive risk controls to stand out in a competitive underwriting market.