How much malpractice coverage should a California physician carry?

An employment agreement requires $1 million/$3 million. A new facility asks for $2 million/$5 million. The physician's real question is not whether one number is "enough." It is what each contract requires, who shares the policy, what the higher limit actually buys, and whether the quote preserves the prior-work protection the physician expects.

Start with the contract floor, then inspect the policy

List each employment, facility, payer, and loan or lease requirement separately. Identify the required per-claim and aggregate limits, whether the contract requires the individual physician or the entity to carry them, and whether it requires a particular insurer status, tail, or notice.

Then read the proposed policy. A $1 million/$3 million declaration does not tell you whether defense costs reduce the limit, whether other insureds share the aggregate, or whether the policy includes the specialty, procedures, sites, telehealth work, and prior acts that create the exposure.

Use filed rates as an illustration, never as a quote

The Doctors Company's California Rate Pages, Edition 10/14, in CDI filing 14-4043 (DCTR-129531290), used $1 million per claim and $3 million per policy year as a base limit pair. It applied a 1.25 factor for $2 million/$5 million and a 1.396 factor for $3 million/$6 million. That explains the rate relationship in that filing; it does not quote a current policy or prove that the same limits are available for a particular physician.

For an internist in Los Angeles or Orange County, that historical mature $1 million/$3 million base rate was $8,274 before credits and debits. The filing illustration produced a $2,069 increase for $2 million/$5 million and a further $1,208 increase for $3 million/$6 million. Each option changed both the per-claim limit and aggregate limit.

Request an actual quote for every limit option. Compare the price only after confirming the same insureds, services, locations, endorsements, deductible or retention, prior-acts terms, and defense-cost treatment.

Lower limits are a policy choice, not just a discount

The same historical table showed a 12 percent premium reduction for limits of $500,000/$1.5 million while cutting the per-claim limit in half. For non-chiropractic specialties, the table listed $100,000/$300,000, $200,000/$600,000, and $250,000/$750,000 as unavailable. A current insurer may use different options, pricing, and underwriting rules. Do not accept a lower limit simply because it lowers premium without comparing the contract floor and the consequences of a shared aggregate.

MICRA does not cap economic loss

Civil Code section 3333.2, commonly called MICRA, caps noneconomic damages in specified professional-negligence cases. In 2026, the statutory amount is $470,000 for injury and $650,000 for wrongful death, subject to the statute's collective provider, institution, affiliation, and timing rules. Economic damages, including medical costs and lost earnings, remain uncapped. A damages cap is not a limit recommendation and does not answer defense cost, settlement, contract, or coverage questions.

Make three comparisons before choosing a limit

First, compare the proposed limit with the highest applicable contract requirement. Second, compare the proposed aggregate with the number of physicians, entities, and other insureds who share it. Third, compare the actual additional premium with the policy terms that stay the same and the terms that change.

Ask for the exact premium, per-claim limit, aggregate, defense-cost treatment, insureds who share the aggregate, and prior-acts or retroactive-date terms for every option. Do not decide from a generic percentage or an old filing.

Know who shares the aggregate

Confirm who shares the limits. One policy can make a physician, entity, nurse practitioner, and physician assistant share the same annual aggregate. One large claim can reduce the amount available for other claims.

Read how per-claim, aggregate, shared, and separate limits work.

Keep the comparison with the coverage record

Keep the contracts, quote, declarations, endorsements, and broker or insurer response together. A policy limit is not a cap on a claimant's damages or the insured's potential liability; whether an amount above the limit is insured depends on the actual coverage and facts. A certificate, premium invoice, or rate table does not establish coverage. The issued policy and endorsements decide whether the work and insureds fall within the coverage grant.