Provided by: Jennifer Kirschenbaum, Esq.
March 8, 2011
If you exhaust your 1/3 million policy in a year then can they go after your personal assets in a malpractice suit? If so, then are there some assets that are protected?
Yes, that is exactly what could happen. If a doctor has a $1.3 million per occurrence malpractice policy, and should a suit be filed with egregious damages attributed to that doctor's malpractice amounting an award for a patient/plaintiff in excess of the insurance amount, then the doctor would be personally liable for the amount in excess. This is the same concept as with any other type of insurance; for instance, with your homeowner's insurance, if you have fire damages in an amount in excess of your coverage, you will have to pay the rest out of pocket. Now, with a malpractice award, monies available in excess of an award would be those monies that are identifiable to the doctor personally and within the doctor's control. It is for this reason that it is important to properly structure for your assets, also, it is important to look into excess liability coverage if your specialty is one, or your practice area is may be located where doctors are sued regularly and awards are generally high. As a general rule of thumb, the further you move your money from your control, the safer it is from an excess award, which is why many doctors elect to form irrevocable trusts for their children, so that their money is moved out of their access should they be sued, and the money is set aside for the benefit of their children.
Of course, protective planning is only useful if set up in advance. If you do not have a will, or you do have a will but you do not have a trust and you do have children, I recommend you reevaluate your structuring to further protect your assets. Also relevant to this topic, if you do not have your power of attorney, healthcare proxy and living will, I recommend you remedy that immediately.
For additional information on this topic, contact Jennifer Kirschenbaum at (516)-747-6700 ext. 302 or at Jennifer@Kirschenbaumesq.com.
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