About Us

History

In the mid-1970s, the medical professional liability insurance industry was on the verge of a crisis.  Between 1969 and 1975, the number of malpractice claims filed against physicians had tripled.  This factor, combined with actuarial predictions of staggering increases in the costs of medical malpractice awards and settlements, compelled the primary source of medical professional liability insurance—the commercial insurance market—to raise rates to levels never before seen or abandon the line of the business altogether.

Faced with a rapidly declining market in professional liability insurance, physicians and organized medicine—led by state and county medical societies and hospital associations—banded together to form a new breed of insurance company: the physician-owned medical professional liability insurance carrier.  The pioneering companies were formed in New York, California, Maryland, Michigan, North Carolina, and Ohio and eventually these new kinds of companies were launched throughout the nation.

Why a physician-owned company?  What made doctors think they could succeed in an industry that was under extreme pressure?  As thousands of physicians faced a dual dilemma—meet the cost of rapidly increasing premiums and find a company that would sell them this fast-disappearing insurance coverage—taking matters into their own hands seemed to be the only solution.

These new companies differed from the commercial insurance carriers, in philosophy and in extent of commitment to their insureds.  They pledged to provide affordable insurance protection, and also to find ways to minimize risk among their physician colleagues.  They looked for new strategies for improving patient care.  These new enterprises, sarcastically dubbed "bedpan mutuals" by their commercial competitors, melded the skills and knowledge of physicians and insurance professionals into a new approach to addressing medical malpractice problems.

These so-called “bedpan mutuals,” the first PIAA member companies, were specifically established to serve the physicians they insured, safeguarding the availability and affordability of medical professional liability coverage.  The cost of coverage was kept to a minimum.  Today, many of the PIAA companies return some portion of their premium income to their insured physicians, as dividends.

The PIAA Is Established

In 1977, the newly established doctor-owned companies formed the Physician Insurers Association of America (PIAA) to provide a forum for exchanging information and solving problems.  The PIAA would also serve as an advocate for an affordable and dependable medical liability insurance market, free from the uncertainties of the commercial market.  The new Association would help make it possible for its member companies to offer reasonably priced liability insurance to healthcare professionals and facilities.  Furthermore, as the unified voice for this unique industry, the PIAA was in an excellent position to promote the practice of high-quality and safe medicine.