Ask medical malpractice insurance companies what they fear most and the answer will likely be "a 'jumbo' verdict.'"money-pile

In insurance speak, a jumbo verdict often stems from a case where something went drastically and tragically wrong during a birth, and the child, mother or both suffered permanent injury. It's easy to see how this can happen: it can result from a breach birth, prolonged labor or the umbilical cord wrapped around the baby's neck.

In many instances physicians deal with such complications by delivering the baby Cesarean -- making an incision in the uterus and removing the infant. In many cases, the problem is not the doctor's or hospital's fault.

But it doesn't matter when a mother testifies to a jury about her brain-damaged child. Such victims are the most sympathetic plaintiffs a lawyer can represent, and are likely to garner a big monetary settlement no matter what type of defense the medical profession mounts.

'Long-tail claim'

A child disabled at birth may need care for the rest of his or her life. Most states allow a minor to bring legal action against a hospital or doctor after the child reaches the age of maturity, says James O'Dell, senior vice president of insurance broker Willis Group Holdings. "The majority [of states] give the former child two years to file a claim, but it can be as much as 10 years," he says.

It's what the industry calls a "long-tail claim:" it will need to be paid for decades to come.

Lawyers, who usually net one-third of the settlement, relish these cases. "The plaintiff's bar advertises for these types of cases because...life care plans for neurologically impaired children can cost multiple millions of dollars," says Paul Greve, a senior consultant for Willis Healthcare Practice. Over the past 18 months, some of the largest jumbo verdicts have occurred in obstetric cases, including two which exceeded $50 million, he says.

Learning to speak 'fetalese'

Some obstetricians have closed their practices, fearing the cost of massive malpractice awards. This in turn has left some parts of the country with a serious shortage of obstetricians willing to tend to mothers giving birth. Others have dropped their malpractice insurance because it's too expensive and simply take the risk of practicing uninsured. Still others have joined hospital groups. The number of hospital-employed physicians of all kinds has nearly doubled in recent years, O'Dell says.

The end result is that the risk has been transferred to hospitals, which have to take steps to improve their procedures. Physicians and nurses now practice "dry runs" to make sure they are ready for obstetric emergencies. They also check, double-check and standardize their procedures, says O'Dell, learning to speak a common language known as "fetalese" across the entire hospital system.