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A comment on medical malpractice insurance rates

I've seen intelligent law professors and economists suggest that damages caps should not affect medical-malpractice insurance rates because most policies have limits anyway. A recent Pennsylvania court decision shows why this is overly simplistic. Dermatologist Paul G. Marcincin allegedly failed to diagnose Stephen Jurinko's skin cancer. Marcincin's insurance company, who held a $200,000 policy, apparently felt that Jurinko's claim wasn't valid, and refused to settle for more than a $50,000 nuisance amount. Jurinko won $2.5 million, and then settled with Marcincin in exchange for Marcincin assigning a "bad-faith" claim against the insurance company to Jurinko. And now Jurinko has won $7.9 million against the insurance company because it refused to settle a case for the $200,000 policy limit. Uncapped damages awards combined with the possibility of second-guessing "bad-faith" insurance lawsuits that multiply damages effectively abolish policy limits for medical malpractice insurers' actuaries. (Shannon P. Duffy, "$7.9M Bad Faith Verdict Upheld by Pa. Federal Judge", The Legal Intelligencer, Mar. 31).



Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.