Very large healthcare organizations may reduce professional liability insurance program costs by retaining a portion of their risk through self-insured retentions (SIRs) or high deductibles. These self-insurance options allow organizations to cede or reinsure the risk they don’t want to assume to ProAssurance—retaining only risk consistent with their risk management and financial resources’ philosophy. Participants then limit the amount they would pay should a catastrophic event occur.
Agreements for deductibles and SIR reinsurance outline the precise trigger point for ProAssurance coverage, including those for defense and indemnity obligations. The policy also may outline an amount that will be paid by the organization before its ProAssurance insurance policy responds.
Organizations also can purchase excess coverage through “fronting” arrangements, with ProAssurance serving to ensure claims will be handled consistently and reliably. In this way, organizations don’t have to meet formal requirements to qualify as a self-insurer. Fronting policies are used to satisfy financial responsibility laws, with ProAssurance serving as the insurance carrier.