News & Updates


MedMal cuts middleman from malpractice insurance sales

Physicians save money by buying malpractice insurance online.

Posted: June 24, 2010 – 3:05am

 By Roger Bull

A new Jacksonville company is looking to change the way physicians buy malpractice insurance.

“The future of insurance,” said Tim Bone, “just like for travel agents, booksellers and everyone else, is to do it over the Internet. We really don’t need the middleman.”

Bone is president of MedMal Direct Insurance Co., which got its certificate of authority last week from the Florida Office of Insurance Regulation.

The business model is this: Physicians apply for their malpractice insurance online directly to MedMal and skip the insurance agent completely.

Bone said the agent usually gets 10 percent of the premium. Eliminating that and other costs will reduce the cost to the physician by 15 to 20 percent, he said.

“It’s a commodity,” he said. “The physician has to show a minimum $250,000 policy to get hospital privileges. You really don’t need a broker to sell you a commodity.”

The standard malpractice policy these days, Bone said, has a $15,000-per-year premium and $250,000 coverage per incident.

While about 25 percent of physicians buy policies beyond that, 75 percent just have the standard one. And the policies are very standard, he said, with no need for an agent or any customizing.

The key, he said, is picking the right physicians to insure because 5 percent of the physicians generate 50 percent of the claims.

“Insuring everyone is a recipe for disaster,” he said.

Bone has worked in medical malpractice insurance for 26 years and, along with MedMal COO and CFO Michael Wallace, founded Physicians Preferred Insurance in 2004. They sold that last year to Florida Doctors Insurance.

Other officers are Chairman of the Board Carter Bryan, whose family was one of the founders of Independent Life and has been involved in insurance firms since American General bought Independent in 1996, and CEO Butler Ball.

The company has $5 million in initial capital, he said. It’s located in the Modis Building, and has only seven employees so far, Bone said.

“You have to start somewhere,” he said.

But he said he’s expecting to sign up several hundred physicians in the first year and average about $4 million in premiums in each of the first few years., (904) 359-4296