Policyholder Services

Does OMIC offer professional liability limits below $500,000 per claim?

OMIC has made the business decision that we will not offer primary liability limits lower than $500,000 per claim except in states in which the insured participates in that state’s Patient Compensation or Excess Liability Fund (Louisiana and South Carolina) and, as a result, carries excess limits through the state. In our opinion, limits lower than $500,000 are not advisable as they may not provide adequate insurance protection. Although OMIC’s average indemnity payment is still well below $500,000, settlements and awards of greater than $500,000 are not uncommon, and the average indemnity amount has increased over the years. Since the company’s inception in 1987, indemnity payments have averaged $189,000; for 2021 year to date, the average payment is $256,000. While many states now cap damages, such caps generally apply only to non-economic damages (pain and suffering). Economic damages, including costs of medical care and lost wages, are typically not subject to caps and can be substantial when the injury is severe.

In addition to concerns regarding limit adequacy, there are also price factors to consider. Although limits of $250,000/$750,000, for example, offer half the coverage that limits of $500,000/$1,500,000 provide, the difference in premium between the two coverage limits is less than 20%.

As a physician-owned insurance carrier, we feel we have an ethical responsibility to our insureds as well as a contractual one, and we believe offering limits below $500,000 per claim would be a disservice to our insureds.

Updated 10/28/2021