A physician moves to Sarasota from another state to join an outpatient practice and applies for her Florida license. The application asks how she will meet the state’s financial responsibility requirement, with options that include professional liability insurance, an escrow account and a letter of credit. A colleague mentions that some Florida physicians practice without malpractice insurance at all. She wants to know which options are actually available to her, what the minimums are and what happens if she chooses the wrong one.
Florida does not require every physician to buy malpractice insurance, but it does require most practicing physicians to show they can pay malpractice claims. The rules are specific, and the choice affects both licensure and personal financial exposure.
The Requirement for Medical Doctors
Section 458.320 of the Florida Statutes requires licensed medical doctors to maintain financial responsibility as a condition of licensure, unless they qualify for an exemption. The amount depends on whether the physician has hospital staff privileges or practices in a licensed ambulatory surgical center.
A physician without hospital staff privileges can meet the requirement in one of three ways: an escrow account of at least $100,000 per claim; professional liability coverage of at least $100,000 per claim with a minimum annual aggregate of $300,000; or an unexpired, irrevocable letter of credit of at least $100,000 per claim with a minimum aggregate availability of $300,000.
A physician with hospital staff privileges or who performs surgery in a licensed ambulatory surgical center must meet higher amounts: $250,000 per claim, with a $750,000 annual aggregate for insurance or a $750,000 aggregate availability for a letter of credit, or an escrow account of $250,000 per claim. The statute also provides that these funds cannot be used to pay defense costs or attorney’s fees, which means defense must be paid from another source.
Osteopathic physicians are covered by a parallel provision in chapter 459 of the Florida Statutes, and the rules should be confirmed against that section for a DO license.
The Requirement for Dentists
Florida dentists are subject to a financial responsibility rule adopted by the Board of Dentistry, Florida Administrative Code Rule 64B5-17.011. It requires professional liability coverage of at least $100,000 per claim with a minimum annual aggregate of $300,000, or an irrevocable letter of credit of at least $100,000 per claim with $300,000 in aggregate availability, issued by a qualifying bank. The dentist’s coverage must also extend to dental hygienists working under the dentist’s supervision.
The rule includes exemptions for dentists who practice only as government employees, those with inactive licenses or not practicing in Florida, and those who practice only as part of teaching duties, among others. Exemptions require an application to the board.
Practicing Without Insurance
Florida allows certain physicians to practice without malpractice insurance, but only under specific conditions. One exemption, sometimes described as going bare, is limited to physicians who have been licensed for more than 15 years, are retired or practice part time within a limit on patient contact hours, and meet requirements regarding prior claims and disciplinary history. Another option allows a physician to practice uninsured by agreeing to pay adverse judgments up to $100,000, or $250,000 for physicians with hospital privileges.
Both options require the physician to notify patients, either by posting a sign in the reception area or giving each patient a written statement that the physician has decided not to carry malpractice insurance. Physicians using the judgment-payment option must pay an adverse final judgment, up to the applicable amount, within 60 days after it becomes final, and failure to do so can lead to license suspension and other discipline.
Practicing without insurance also means paying for legal defense personally, since defense costs are not covered by the financial responsibility funds. Most physicians who have assets to protect, or who need hospital privileges or network participation, find that insurance is the more practical choice.
Why Minimums Are Usually Not Enough
The statutory minimums are licensing requirements, not recommendations. Hospitals, ambulatory surgical centers, managed care networks and employers frequently require higher limits as a condition of privileges or contracts. Claims involving serious injury can exceed the minimums, and any amount above the limit can become the physician’s personal responsibility. The right limit depends on the specialty, the procedures performed, the setting and the physician’s personal assets.
Keeping Coverage Continuous
The requirement applies continuously while practicing. A gap in coverage can put a license at risk, and the statute provides for suspension if an insurer cancels or does not renew coverage and the physician cannot show compliance through another method. Changing jobs or carriers requires attention to retroactive dates and tail or prior acts coverage, which we cover in our article on claims-made versus occurrence malpractice insurance and tail coverage.
Physicians and dentists who own practices also need coverage for the business itself, from general liability and property to cyber and workers’ compensation. Our pages on medical office insurance and dental office insurance explain how those pieces fit together.
Worth Confirming With Your Agent
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Which financial responsibility amount applies to you, based on hospital privileges or surgical center work
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Whether your hospitals, networks or employers require limits above the state minimum
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Whether your coverage is claims-made or occurrence, and how changes in employment affect it
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Whether defense costs are covered in addition to your limits
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Whether your dental coverage extends to the hygienists you supervise
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How you would remain compliant if your carrier canceled or did not renew
This article is general information and is not legal or medical advice. Confirm current requirements with the Florida Board of Medicine, Board of Osteopathic Medicine or Board of Dentistry.
Talk to Prestige Insurance Group
Prestige Insurance Group helps Florida physicians and dentists choose professional liability coverage that meets licensing requirements and the expectations of their hospitals, networks and employers. If you are getting licensed, changing positions or reviewing your limits, we can compare options from specialty markets with you.
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