We'd like to present a bookend perspective on the personal risk that physicians face in all the passages of our careers. By bookended, we mean Travis' perspective as a medical student vs. Bill's viewpoint as a recently retired physician with long-time experience in risk management. Our goal is to highlight key hazards, some of which are familiar and others that might go unnoticed until they become unavoidable. We wish to help WCI readers dodge any “eyes closed and fingers crossed” approaches.
Today, we'll focus on property and casualty liability—the risks that affect physicians and their patients.
Can General Liability Be as Disruptive as Professional Liability?
Travis:
For many readers, starting medical school was both the best and worst time of their lives. In the midst of absorbing an overwhelming amount of information in a short period, you stood shoulder-to-shoulder each day with classmates who quickly became close friends—the same people you keep in touch with today as you reflect on the personal and professional risks encountered along the way.
As you struggled to drink from the proverbial “firehose” of first-year anatomy, physiology, and biochemistry, gaining acceptance to medical school felt like your biggest (and perhaps only) goal. Now, as a current M2 studying for Step 1, the last thing on my mind is the concept of liability in the distant future of residency and attending life. This topic seems to be absent from nearly everyone’s thoughts as students prepare for long clerkship hours and the residency application process. So, when do we learn about risk management in medical school? Simply put, we don’t.
The common belief among students is, “Isn’t the best way to avoid malpractice risk just to be a good physician—one that patients love, and no one wants to sue?” Unfortunately, the answer is no. Even the most cautious, compassionate, and well-intentioned physicians can find themselves entangled in lawsuits for years over circumstances entirely outside their control.
After hearing countless physicians share stories of prolonged and often frivolous malpractice claims, it has become clear to me that liability and malpractice are barely addressed during all four years of medical school. Because medical schools cannot (or do not) incorporate these difficult but necessary lessons into the curriculum, the responsibility falls on students to learn how to protect themselves and their families from the financial and emotional burden of professional liability. Through conversations with experienced physicians, and particularly with Bill, I’ve come to appreciate that malpractice is only part of the picture. General liability can be just as disruptive, and it can arise at any point during training or throughout a physician’s career.
Bill:
Physicians face and accept unique personal risks as part of the privilege of practicing medicine in a free enterprise system. Because of our collective standing and reputation, these exposures may be greater than similar exposures for our non-medical colleagues and friends, and these risks can unfairly extend down to our family members. Some of these hazards are sometimes accepted unknowingly.
Thoughtful consideration of certain perils and their potential consequences better equips us to manage an actual event. In college, we learned in philosophy that the more we constructively consider and study hypothetical future trouble, the better equipped we become to deal with it effectively in real time.
More information here:
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A Story of General Liability
The following synthesized story is based on three different but true events familiar to Bill. It is presented here as a hopefully riveting illustration of the unquestionable need for adequate general liability (umbrella) coverage.
Umbrella insurance is an elective but vital product where its value can rival that of our required medical liability insurance. It is a type of liability insurance that provides coverage beyond the limits of standard property and casualty policies to protect us from significant homeowners or auto claims and unexpected lawsuits with excessive awards.
In planning this account, we carefully considered that some WCI readers may never have been personally exposed to the details of a legitimate P&C claim and that today’s topic could serve as an introduction to future discussions of asset protection.
A Doctor's Experience
Approaching retirement after a distinguished 30-year career, our physician and his wife had carefully planned for retirement. Both were looking forward to helping one of their four children open a newly acquired local non-medical business.
One Saturday morning, his wife was involved in a tragic car accident. As she stopped in her neighborhood at a four-way intersection, her cell phone slipped onto the floor. She instinctively reached down, and her foot slipped from the brake onto the accelerator, causing her to T-bone a 79-year-old woman. The victim, previously vigorous and independent, required a six-week hospitalization; three subsequent months in long-term acute care; additional time in skilled nursing with daily PT; and, finally, permanent assisted living.
Before the accident, she had lived independently as a well-known and beloved senior member of her community and church.
The Trial and Aftermath
Good faith efforts were made by both sides to settle the case (including arbitration), but no agreement could be reached by the insurance companies involved. Her attorneys then requested a jury trial. After several days of expert testimony (including one economist), the jury returned a verdict for the plaintiff. The award was over $3 million, and it included all future care costs for her agreed-upon longer life span. There was no basis for an appeal.
Our physician's standard $500,000 umbrella policy covered some legal defense costs but left almost nothing for the $3 million+ judgment. The financial consequences were tough and included a postponed retirement, a second mortgage, and the sale of properties and vehicles. Tax refunds and wages were garnished, as agreed upon by both parties.
The Outcome
Our physician worked two jobs for several years, and he paid down the judgment. Fortunately, he emerged as a still productive and proud, though traumatized, professional.
The Importance of Umbrella Coverage
This case underscores the particularly troubling reality of inadequate umbrella coverage. For a very reasonable annual premium, the outcome could have been different when our stories unfolded about 15 years ago.
Umbrella insurance is far less expensive than medical malpractice insurance. According to Coverage Advisor, the 2025 median national cost of an umbrella policy was about $200-$300 per $1 million of coverage per year. As do many homeowners, Bill carries $500,000 of umbrella insurance bundled directly into his homeowners policy. For decades, he has also purchased an additional $4 million in coverage for an annual premium of $598 [2025]—so (as “bundled”) only about $150 per $1 million of coverage.
By comparison, the average South Carolina annual premium for a $1 million/$3 million medical liability policy for obstetrics and gynecology (MagMutual Insurance Company) is approximately $46,000. Of note, the same OB-GYN policy in “high-risk” regions, like New York and California, can reach $100,000-$200,000.
In preparation, Bill surveyed several colleagues. Two were unsure about whether their homeowners policies even included umbrella coverage. Three others had never considered purchasing additional coverage. This very informal effort punctuated a lack of ongoing awareness about umbrella coverage, highlighting the likelihood of a persistent educational gap—a disparity which should be addressed during medical school, residency, fellowship, and beyond.
Umbrella liability insurance is far less expensive than professional liability coverage. Unlike many of the unavoidable risks in medicine, umbrella insurance offers cost-effective financial protection.
More information here:
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Mitigating General Liability Risk
Physicians, students, and residents should prioritize safety practices and secure adequate property and casualty insurance, including umbrella coverage. Regularly reviewing coverage is essential to prepare for unexpected accidents. Deciding on the right level of coverage involves assessing local accident settlement costs along with guidance available from local attorneys and local experienced insurance agents. The critical question: how much does it cost to settle an accident case in my geographic location?
We physicians would be well served by judiciously identifying the best defense attorneys in our local communities. An even more important point, we should all be willing and even eager to serve as expert witnesses to either support a professional colleague or an injured patient. After all, each of us will expect someone to step up to support us in our time of personal need. And none of us wishes to bear the burden of hypocritical shame.
In his early 30s, Bill learned that the process of defending a case provides personal jurisprudence education of equal value to the best parts of residency training. Then, too, as pointed out by WCI, insurance companies willingly pay $500-$900 per hour for expert witness review, deposition, and testimony work.
General liability can certainly be as unsettling as professional liability, but with education and attention, it can be managed effectively and affordably. All that is required is an ongoing interest, self-education, and thoughtful attention over time.
Do you have umbrella insurance? Have you ever had to use it? What happened? What other property and casualty risks are you running?
The White Coat Investor may receive compensation from White Coat Insurance Services, LLC; licensed in all states including MA and DC; CA license #6009217; NY license #1758759 (exp. 6/2027); Registered address: 10610 S. Jordan Gateway, #200 South Jordan, UT 84095. This does not affect the cost or coverage of insurance.