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).