Malpractice: We settled, I lost

It happens all the time: A doctor is sued, he's convinced he did nothing wrong, and he wants to fight. But his malpractice carrier urges him to settle because it's less risky than the threat of a huge jury verdict. But there's a risk to the doctor in this scenario that his carrier may not warn him about: A settlement could result in the cancellation of his policy. That's what happened to Bob J. Herrin, a general surgeon in Marshall, TX.

Herrin had been insured by The Medical Protective Company for more than 36 years. During that time he'd been sued half a dozen times, a record his agent allegedly described as "particularly impressive" for a surgeon. "Most of those were just nuisance suits that were eventually dropped," says Herrin, "and only one resulted in a token payment of $5,000."

In 1995, however, a patient Herrin had performed gall bladder surgery on sued him for malpractice. "It wasn't negligence," he insists, "just an unfortunate result." He wanted to fight the case, Herrin recalls. "When you settle, it's like admitting guilt, and your name ends up in the National Practitioner Data Bank." But the company urged him to settle. "They told me it's cheaper to pay the settlement than to fight the case," he says.

More than a year after Medical Protective paid the settlement, however, the company informed Herrin that it wouldn't renew his policy when it expired in 1997, due to "claim and suit frequency and severity." Curtice apparently argued unsuccessfully for the renewal. In fact, Herrin calls him "a dear friend of mine, a decent person. I don't think he knew what the company was planning to do to me."

Herrin obtained coverage from another carrier, but that one later stopped writing policies in Texas. He tried to find comparable coverage with several other carriers, but once they learned he'd been dropped by Medical Protective, they turned him down. He was offered limited coverage for minor, office-based surgery, but since his practice consisted mostly of hospital-based surgery, that wouldn't work. He then contacted the state's Joint Underwriting Association, which provides coverage for high-risk applicants, but their policy would have cost him about $75,000-nearly four times his former rate.

Forced to retire, Herrin sues his insurer Unable to find affordable coverage, Herrin, then close to 70, was forced to retire, years before he'd planned to. "I still had a successful practice," he recalls. "I had slowed down by then, and my income had dropped, but I still had a lot of wonderful patients who really depended on me. I had to tell them all that I couldn't take care of them anymore. That really hurt. I was devastated."