Fewer Physicians Report Being Sued but Medical Malpractice Claim Severity Keeps Rising

Physicians report being sued less often, but medical malpractice claims are becoming more expensive, more volatile, and more consequential—driving up malpractice costs and rate pressure.

Actual medical malpractice claims frequency has declined from historic levels, but it remains higher than physician-reported lawsuits captured in some survey-based measures. In 2025, actual claims frequency was approximately 4.6 percent, down from 7.5 percent in 2016, and well below the roughly 17 percent average observed between 1991 and 2005.

Physician-reported lawsuit data provides an important perspective on medical malpractice trends, but it is not the same as actual claims frequency. Surveys capture how often doctors report being sued, while claims data provides the more relevant measure for assessing malpractice pricing and rate pressure.

Although the number of claims has declined, the claims that do occur are becoming significantly more expensive, increasing insurers’ costs and reshaping expectations for future losses.

The Most Severe Claims Are Driving Pressure

The average of the top 50 medical malpractice verdicts rose from $32.6 million in 2022 to $48.5 million in 2023, then to $51 million in 2024 and $50 million in 2025. At the same time, the number of claims exceeding $2 million reported to the National Practitioner Data Bank (NPDB) has increased more than tenfold since 1990.

Patient safety improvements, stronger risk management practices, and legislative reforms in many states have contributed to lower claims frequency and a more balanced liability environment. But malpractice pricing is driven by both frequency and severity: how often claims occur and how costly they become when they do. As severity continues to rise, lower frequency alone is not enough to relieve pressure on premiums.

Medical malpractice is also a long-tail line of insurance, meaning claims often take years to fully develop and resolve. In many cases, it can take three to five years before insurers can determine whether rates for a given policy year were adequate. When severity trends accelerate through larger settlements, larger indemnity payments, and nuclear verdicts, premium pressure can build even during periods of low frequency.

Filed rates submitted to regulators are starting points; final premiums reflect underwriting, claims experience, policy structure, credits, and other adjustments.

A Changing Medical Liability Environment

The medical professional liability market has evolved significantly over time. Once largely focused on individual physician coverage, the market now supports increasingly complex healthcare systems, integrated delivery models, and larger physician groups.

As medicine has become more interconnected across teams, facilities, and care settings, insurers have also had to evolve with more sophisticated analytics, broader risk management capabilities, and longer-term claims strategies. At the same time, advancements in medicine have raised patient expectations, even in complex and high-risk cases where outcomes remain uncertain.

Malpractice exposure is shaped not only by clinical realities but also by how outcomes and damages are valued within the legal system. Large verdicts can influence settlement expectations, reserving practices, and litigation strategies across similar claims, expanding the impact of a single outcome beyond the case itself.

The NPDB provides an important measure of severity because it tracks actual malpractice payments made on behalf of practitioners. Based on NPDB physician payment data, the average payment reached approximately $514,000 in 2025, roughly 20 percent higher than in 2022.

Industry data also shows malpractice severity rising approximately 4.5 percent annually nationwide, with trends closer to 6 percent between 2022 and 2025. Over time, those increases flow through to pure premium and, eventually, into rates.

Social Inflation and Nuclear Verdicts

Social inflation refers to the gap between ordinary economic inflation and actual growth in claim costs. Between 2014 and 2020, general U.S. inflation increased roughly 15 percent, while the average paid malpractice claim reported to the NPDB increased approximately 42 percent.

Actuarial research estimated that social inflation added between $2.4 billion and $3.5 billion, or approximately 8 to 11 percent, to losses for physician-focused insurers during the decade ending in 2021. Updated analysis for the decade ending in 2024 places that estimate closer to $4 billion. The years from 2022 through 2024 were particularly significant, with actual losses estimated at approximately $1.8 billion higher than expected.

For year-end 2025, National Association of Insurance Commissioners (NAIC) Annual Statements of Actuarial Opinion from the top companies representing 90 percent of medical professional liability premium show that more than 60 percent mention social inflation as a risk factor that could lead to material adverse deviation.

Verdicts continue to shape settlement expectations across the broader litigation environment, even though most claims never reach trial. Approximately 93 percent of medical malpractice claims are resolved before trial, and physicians prevail in most cases that do proceed to verdict. Still, large plaintiff verdicts can influence the value of cases that settle.

That dynamic has contributed to the rise of nuclear verdicts, generally defined as awards exceeding $10 million. Verdict tracking data identified 70 medical malpractice verdicts exceeding $10 million in 2023, 52 in 2024, and 60 in 2025. In 2018, 19 states recorded 25 such verdicts. By 2024, 21 states recorded 52.

The number of states recording medical malpractice nuclear verdicts increased from 19 in 2018 to 21 in 2024, while the number of such verdicts rose from 25 to 52.

One example occurred in Utah in 2025, when a judge awarded $951 million in a birth injury malpractice case, reportedly the largest medical malpractice award in U.S. history. For context, the total of all medical professional liability direct premium written in Utah that year was only $102 million, according to tracked data from the NAIC. While outcomes of that scale remain rare, verdicts like this one can influence expectations far beyond a single case. Notably, the award was issued by a judge rather than a jury.

Modern litigation strategies can also affect outcomes. Anchoring—the tendency for initial numbers presented during litigation to influence perceptions of reasonable damages—is a frequently used tactic. In one study involving 265 judges who all reviewed the same case, those judges who were not given a damages demand letter awarded an average of $808,000, while judges exposed to a $10 million demand letter awarded approximately $2.2 million on average.

What This Means for Physicians and Patients

When awards and settlements rise, the effects extend beyond individual cases. Higher severity contributes to increased premiums, greater financial uncertainty, more defensive medicine, and additional pressure on physician practices, hospitals, and healthcare systems.

Fair compensation for injured patients remains essential, but rising volatility and unpredictability can also affect affordability, access to care, and long-term system stability, particularly in higher-risk specialties and underserved areas.

That is why discussions surrounding tort reform, legal predictability, and transparency in third-party litigation financing increasingly extend beyond insurance economics and into broader concerns about healthcare affordability and access. In June, North Carolina became the first state to prohibit third-party financing with House Bill 315, which makes it "unlawful for a person to engage in litigation investment" in North Carolina. The American Tort Reform Association has estimated that the tort system costs the average American family of four $6,664 annually in the form of a hidden “tort tax” embedded in prices.

In this environment, physician-owned insurers continue to play an important role through proactive risk management, patient safety initiatives, informed advocacy, and long-term alignment with clinical practice. That alignment helps support fair liability standards while protecting physicians, patients, and the stability of healthcare delivery.