Why malpractice insurance isn’t enough on its own.

By Tresp, Day & Associates · January 25, 2023

Malpractice premiums are one of the largest costs of practicing medicine, and that expense creates a natural assumption: I’m insured, so I’m protected. The reality is more nuanced, and the gap is where personal financial disaster lives.

Where insurance falls short

Policies have limits, a judgment that exceeds them is the physician’s personal responsibility. They have exclusions, certain claims and conduct aren’t covered. And they can be contested by the carrier. The very claims most likely to threaten a physician’s wealth, the large, unusual, or excluded ones, are the ones insurance is least likely to fully absorb.

The role of asset protection

Structural protection works differently: instead of paying a claim, it puts your personal assets beyond a creditor’s reach in the first place. Valuable assets held through properly designed trusts and entities, rather than in your own name, stay protected even if a judgment blows past your policy limits. Insurance and asset protection work together: the policy handles ordinary claims, the structure protects against the catastrophic ones.

Set it up early

As with all asset protection, timing is everything, the structure must be in place before a claim arises. Tresp, Day & Associates builds protection plans tailored to the exposures physicians and other professionals face.