Physicians Network – Medical Malpractice Risks
The Problem:
A California-based Physicians Network, an association of independent doctors, struggled to secure affordable liability coverage for niche specialties like telemedicine and cosmetic surgery. Traditional insurers charged high premiums or excluded critical coverage areas, exposing doctors to malpractice risks.
The association needed a solution that would deliver affordable, specialized protection without financially burdening the Network itself.
The Solution:
Nova partnered with the Physicians Network to build a customized group insurance program within a Segregated Portfolio Company, focusing on:
- Membership Risk Assessment: Identification of vulnerabilities in telemedicine, cosmetic procedures, and outpatient surgical events.
- Group Program Design: Structured a pooled risk model within the SPC framework.
- Risk Allocation and Sharing:
- Premiums funded a shared risk pool.
- Higher-risk profiles paid supplemental assessments.
- Losses above $3M annually were ceded internationally at 45% savings.
- Regulatory Advisory: Ensured healthcare and malpractice compliance under U.S. and California-specific regulations.
- Legal Separation: The SPC isolated each member’s coverage, ensuring financial and operational transparency.
The Benefits:
- Affordable Coverage: 25% reduction in premiums across specialties.
- Expanded Protection: Coverage for emerging risks like telemedicine malpractice.
- Cost Stability and Dividends: Predictable annual premiums and reserve dividends averaging $5,000 per doctor.
- Capital Retention: Funding of 50 hours of continuing education annually per member.
- Scalability: Easy onboarding of new specialties without structural overhaul.
The Impact:
The Physicians Network now offers a resilient, future-ready insurance solution that empowers its doctors to grow, innovate, and protect their practices—while securing long-term financial and operational stability.