Provided by: Jennifer Kirschenbaum, Esq.
January 17, 2018
Question:
Hi Jennifer,
I'm taking a job in a state that doesn't have malpractice requirement limits. What should I do to protect my assets personally? Do I have to be concerned?
Thanks,
Dr. O
Answer:
Many states that do have insurance limits have imposed same because of rampant litigation. So, if you are moving to a state that doesn't have malpractice requirements or a state with low-minimal malpractice limit requirements, there's also a chance that state has tort reform, or mechanisms in place to protect from false claims against doctors. Even so, I highly recommend maintaining insurance. If you are moving to an employment role, definitely ask the employer to cover the cost. If the employer refuses to do so, you may want to price out insurance yourself. Often I am asked what to do if a concern remains, even with insurance, how to protect assets. Well, to break it down, insurance is the best defense because it provides a layer of payout before personal assets would potentially be attached to satisfy a judgment obtained by a suing patient/patient representative. If someone were to obtain a judgment in excess of available insurance, personal assets would be subject to potential satisfaction.
That being said, for most states and most doctors, getting assets away from you and to a place you are "judgment proof" is not really an option for most assets. Why? Because you need the assets to live, and potentially do not have a reasonable solution for transfer. The basic rule for asset protection is this - the more accessible the asset for you, the easier it is to attach for judgment satisfaction. So, to be "judgment proof", is really just saying "I have NO assets". Which most people who say really mean, I have moved most of my assets outside my control and access.
Of course for those of us who need money to live, and who live in communal property states, or where we aren't ready to trust our spouses with 100% of our assets (or kids, or parents, or any individual), it is pretty impossible to move to "judgment proof". Which brings us back to the first section - look to have "enough" insurance. How much is enough? Depends on your specialty and practice structure. If you are hospital based, it is likely any claim against you would also result in claim against the hospital, and the hospitals higher insurance limit would kick in as available for settlement.
