Reviewed by Paul E. Walker

Buying the “tail” of your Claims-Made Medical Malpractice Insurance Policy may be expensive. However, facing a lawsuit without this insurance coverage may be far more financially catastrophic. A plaintiff may come forward with a malpractice claim regardless of whether or not you have active coverage. And when they discover your uninsured status in your response early in the case, they may pursue your personal assets instead. With that being said, please follow along to find out the legal consequences of being sued without insurance and how one of the proficient New York attorneys representing uninsured physicians at Walker Medical Law can protect you and your financial status at this critical time.

What Are the Consequences of Being Sued for Medical Malpractice Without Insurance?

Simply put, without medical malpractice insurance, you are personally responsible for hiring legal counsel to defend your case. Attorney fees and other associated court costs (i.e., filing fees, depositions, expert testimony, medical analyses, etc.) may quickly add up.

This does not even consider if your case results in an unfavorable verdict, in which you are found liable and ordered to compensate the plaintiff for their claimed damages. That is, you may have to pay out of pocket for their medical bills and lost wages. What’s worse, New York State does not place a cap on non-economic damages like pain and suffering, emotional distress, and loss of enjoyment of life. Depending on how severe the plaintiff’s injuries and damages were, this may significantly inflate what you owe.

Unfortunately, unlike other states, New York State law permits plaintiffs to enforce medical malpractice judgments against non-exempt assets aggressively. This means if you lose your case, you may be made vulnerable to wage garnishment, along with having your bank accounts, non-retirement investments, non-exempt vehicles, and excess home equity targeted.

Which Assets Are Protected, and Which Are Not?

New York does shield certain assets from collection, so understanding where your assets fall can help you better prepare for what to expect.

Generally Protected

  • 90 percent of your recent earnings, under CPLR § 5205
  • Most retirement savings, including IRA and Keogh plan assets
  • A set amount of equity in the home you live in, under CPLR § 5206, which varies by county and is adjusted over time

Generally Exposed

  • Bank accounts
  • Investments held outside a retirement plan
  • Vehicles beyond the statutory allowance
  • Home equity above the exemption

Can Your Former Insurance Carrier Still Help?

Before assuming you are on your own, you should send the lawsuit papers to your prior malpractice insurer immediately, even if you never continued coverage. However, there are a few things you should consider discussing with your attorney:

  • Coverage depends on timing: it matters when the care the alleged malpractice occurred, when the claim was made, and when it was reported
  • The carrier may still owe you a defense, or may choose to settle the case
  • If it does, you may be responsible for reimbursing the carrier
  • If co-defendants have active malpractice insurance, one of their carriers may assume part of your defense on your behalf

Can You Settle a Malpractice Case Without Insurance?

You can settle a malpractice claim without insurance, but negotiating directly with a patient or their attorney without legal counsel can be incredibly risky.

Risks of Negotiating on Your Own

  • Saying something that sounds like an admission of fault
  • Agreeing to terms that create further financial or professional problems
  • Leaving out a release of liability, so the patient can sue again over the same care
  • Negotiating without knowing how much time is left: In accordance with CPLR § 214-a, a malpractice action must generally begin within two years and six months of the act the complaint stems from, or the last date of continuous treatment

Having an attorney involved before the first settlement discussion even happens can help you avoid these traps and may end the dispute before it turns to litigation.

What Should I Do Immediately After Being Sued for Malpractice?

After being served with medical malpractice papers, you must resist your instinct to contact the plaintiff. Even though you may want to plead with them to drop the case since you are uninsured, you do not want to run the risk of inadvertently admitting liability or committing any other legal violations. It is best to let your legal representative handle all formal correspondence from this point forward.

Secondly, you should consult with your attorney and decipher whether buying into a medical malpractice insurance policy now is worth it. This is because some policies may offer “prior acts” coverage. However, this may not apply if your alleged medical malpractice was already reported and made known to you. If all else fails, even if you are technically uninsured, your attorney may look at your employment contract and attempt to argue that your employer’s insurance plan applies, your employer acted negligently and therefore must provide you coverage, etc.

Contact an Experienced New York Malpractice Attorney Today

You should not let the pressure of protecting your finances during your lawsuit rest solely on your shoulders. Please allow one of the talented New York attorneys representing uninsured physicians from Walker Medical Law to assist you with your legal strategy. We look forward to helping you with your case. Contact us today.