Litigation activity against Florida's nursing home providers increased dramatically over the past two decades. This has been a significant concern for policy makers and nursing home administrators as they attempt to balance the realities of negligent behavior with its impact on the overall cost and quality of long-term care. This study uses Medicare Cost Report data and OSCAR (Online Survey, Certification, and Reporting) data for Florida's nursing facilities over a five-year period from 2001 to 2005 to examine the effect of quality and staffing on malpractice paid-losses. The results from the multiple regression analyses indicate that staffing levels are strongly associated with paid-losses for malpractice claims. Nursing homes with higher registered nurse to resident ratios are less likely to experience malpractice paid-losses. In contrast, higher nursing assistant to resident ratios are significantly related to higher probability of malpractice paid-losses. The effect of total deficiency on malpractice is not significant. These findings suggest that increases in more skilled nurse staffing are associated with lower likelihood of nursing home malpractice paid-losses. However, nursing homes need to balance the overall cost and quality of their facilities related to staffing and malpractice litigations.