The Origins of Medical Malpractice

The concept of medical malpractice has existed since ancient times — most notably in ideas emphasized in Hammurabi’s Code from 1754 BC Babylonia. As outlined in a New York Times article, the code detailed specific legal consequences for medical negligence.

Later came the introduction of the Hippocratic Oath, and with it, an implied baseline for the standard of medical care. To this day, physicians swear the Oath upon graduating from medical school.

The first recorded medical malpractice case occurred in 1374 when a legal case was brought against an English physician for failure to remedy an injured hand. The case was eventually dismissed, but it provided a foundational precedent for the future of medical malpractice law, namely, that physicians could be held liable for negligent care. However, there would be no liability for the physician if proper treatment was given, regardless of the outcome.

Medical Malpractice in the United States

Soon after the United States gained independence, the first recorded U.S. medical malpractice case occurred in 1794. The plaintiff ultimately won the case and was awarded £40 in damages.

The following century saw a dramatic rise in the number of U.S. medical malpractice cases in what became known as America’s first medical malpractice crisis from 1835 to 1865. According to an article published in the National Library of Medicine, one New York surgeon claimed that nine out of every ten local physicians had faced charges of malpractice by the mid-1800s.

The historical circumstances of the 19th century, including multiple devastating wars, fostered an environment of distrust around physicians that led to a drastic increase in malpractice lawsuits. The prevalence of poorly healed bone fractures and the normalization of amputation as a treatment for many orthopedic afflictions were the most common reasons behind the medical malpractice crisis. The demand for malpractice defense in America had never been higher. Even Abraham Lincoln defended physicians in medical malpractice lawsuits.

During the malpractice crisis, many doctors feared the loss of their reputations and livelihoods due to the growing frequency of malpractice lawsuits. By the end of the 19th century, it became clear that physicians needed strong and reliable protection against malpractice claims to safeguard their reputations, financial assets, and careers.

The First Medical Professional Liability Insurer

In the United States, the first company to defend healthcare providers against medical malpractice claims was MedPro Group’s predecessor, Physicians’ Guarantee Company. Founded in 1899 by two Fort Wayne physicians – Alpheus P. Buchman and Miles F. Porter – the company offered pre-paid legal service for malpractice litigation defense. The goal of the company was to aid and protect the medical profession against malpractice claims by becoming the leading legal expert on medical malpractice in the country.

A few years later in 1902, Physicians’ Guarantee Company became Physicians’ Defense Company. Then, in 1907, two men named Byron H. Somers and Charles M. Niezer left the company to start The Medical Protective Company (Medical Protective).

In 1909, Medical Protective reorganized as an insurance company and became the nation's first carrier to offer medical professional liability insurance, with broad coverage for professional services, defense outside limits, and the insured's consent to settle required. It was also the first insurance company to specialize exclusively in medical professional liability insurance. In 1913, Medical Protective acquired Physicians’ Defense Company. Medical Protective was led by Byron Somers’s family until the late 1990s.

MedPro Through the Years

By the late 1920s, Medical Protective (MedPro) had become the largest insurer of medical providers in the nation, insuring an estimated 30% of physicians and surgeons. The 1930s saw the expansion of Medical Protective’s policy coverage as well as the company’s creation of the first “medmal bible” for the industry called “Brief on Malpractice Law.” It set the standard for the medical professional liability insurance industry and was influential in how cases were defended.

Throughout the 1940s, MedPro continued to insure doctors, including physicians and dentists serving in World War II. By this time, the company had defended over 50,000 claims. In the 1950s, MedPro began insuring residents and interns, emphasizing its focus on the future of healthcare.

Beginning in the mid-1960s, malpractice awards surged, a fact many insurance carriers were unprepared for. Between 1970 and 1974, Cook County, Illinois experienced a 700% increase in average malpractice awards compared to the previous five years. Similar trends occurred across the United States. The rise in malpractice awards led to an industry crisis in the 1970s and 80s. Medical Protective was one of few insurance providers to survive the crisis.

In 1998, General Electric recognized Medical Protective’s lasting innovation and acquired the company. Seven years later in 2005, GE began plans to step away from insurance. Medical Protective was then purchased by Warren Buffett’s Berkshire Hathaway — one of the most trusted names in the business world –– adding another chapter to MedPro’s story of strength and reliability.

Of the acquisition, Buffett noted, “For more than 100 years, Medical Protective has been the ‘gold standard’ in protecting and defending the assets and reputations of healthcare providers.”

Under Berkshire’s leadership, MedPro quickly expanded, acquiring Princeton Insurance, the largest healthcare liability insurer in New Jersey, in 2011 and PLICO, the leading healthcare liability insurer in Oklahoma, in 2015.

Additionally, Consolidated Health Plans (CHP) was acquired by Berkshire Hathaway in 2011. In 2017, under MedPro Group, CHP established two accident and health insurance carriers: Commercial Casualty Insurance Co. (CCIC) and Atlanta International Insurance Co. (AIIC). In 2019, CHP was renamed Wellfleet, and the previously established companies became Wellfleet Insurance Company and Wellfleet New York Insurance Company, respectively.

As the company continued to evolve, Medical Protective rebranded to MedPro Group — a representation of continual growth and innovation in the insurance industry. Together, the MedPro family has established and maintained high standards of excellence, recognizing that collective strength and resources enhance the ability to serve insureds.

MedPro Group Today

Since 1899, MedPro has maintained the status of industry leader in healthcare liability insurance. MedPro has more experience than any other carrier, handling over half a million claims since its founding. Consistently earning financial strength ratings of A++ (AM Best) and AA+ (Standard & Poor’s), MedPro also holds a 90% national trial win rate and an 80% rate of claims closed without payment.

Over the past 125+ years, MedPro Group has remained steadfast in our commitment to our earliest mission: protecting the reputations of healthcare providers. MedPro’s remarkable journey reflects a narrative of unwavering dedication to our insureds – the very individuals who devote their lives to the well-being of others. In safeguarding those who protect us, MedPro ensures that medical professionals can focus on their vital work, secure in the knowledge that we’ll be there at every turn.