Even though insurance carriers may devote substantial resources towards defending a claim, an important concern of many physicians is that a lawsuit may produce an award in excess of their level of coverage, or that coverage may not be available at some point in the necessary amount and at a price that is affordable.
In addition, there are other risks that may not be covered by insurance. Many physicians have concerns about the financial impact of litigation in the event of possible billing disputes with insurers or government agencies. In these types of cases, the first move may be an attempt to freeze all of the physician’s assets. If such a freeze is granted, the case is effectively over. A defendant in such a case will have no ability to pay personal or business obligations (or attorney’s fees). Without access to funds, regardless of the merits of the case, or whether the defendant would ultimately prevail, an asset freeze virtually eliminates the possibility of conducting a defense, quickly forcing a fast and unfavorable settlement – on any terms demanded by the plaintiff (especially the government).
Other common sources of lawsuits are those faced by every business owner. The courts are overflowing with cases based on complaints by disgruntled employees, disputes with partners, liability from real estate, tax problems, and good deals that turned bad.
The most conservative business approach is to combine whatever insurance coverage is available with appropriate asset protection planning. Asset protection closes the holes in coverage and once established, will be there in the future, regardless of the gyrations in the insurance market. For physicians without insurance coverage now, an asset protection plan is the only realistic alternative for continuing to operate their medical practice.
The ideal benefit of an asset protection plan is that it stops litigation before it begins. A contingent fee attorney is less likely to proceed against a physician with an asset protection plan; in the case of assets not subject to legal collection – with no “deep pocket” to pursue – an attorney will not knowingly waste his or her time and money on the case. But, if a case does proceed, for whatever reason, asset protection provides a legal shield, protecting and insulating assets from the judgment. I