Have a question? Below are some of the most common questions about medical malpractice insurance we get asked. Don’t see the answer you’re looking for? We’d be happy to help – contact us with your questions.
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- Considering Your Insurance Options
- Costs of Tail Coverage Malpractice Section
- Understanding Tail Coverage Malpractice Insurance Section
You can buy directly from the employer’s carrier on your own. However, to get multiple quotes, you’ll need to work with a malpractice insurance broker who has experience with standalone tail coverage. It’s important to note that most insurance carriers do not work directly with doctors. Tail insurance is a subspecialty for medical malpractice providers and requires a specialized broker.
Yes. Tail insurance can be purchased as a standalone tail policy or from the present carrier as an endorsement (or add-on) to an existing claims-made policy. To qualify for Standalone Tail Coverage, you must have your application reviewed and approved by a malpractice insurance carrier underwriter. MEDPLI will help you get your application reviewed by the top A-rated carrier underwriters.
Malpractice premiums typically correspond with the physician’s specialty and its risk profile. Surgical specialties with the highest-risk profiles pay the highest malpractice premiums. These specialties include neurosurgeons, OBGYNs, general surgeons, bariatric surgeons, plastic surgeons, and orthopedic surgeons.
Traditional tail coverage premiums generally equate to 200-300% of the expiring annual claims-made policy premium. A physician’s rate also considers geography, specialty, and claims history. Each carrier utilizes a proprietary algorithm to assess these factors so expect rates to vary widely among carriers.
Yes, but you’ll often pay more than necessary when you buy the tail offered through your employer’s insurance company. Instead, you can hire MEDPLI to shop the standalone tail market for the best deal. We work with A-rated carriers to deliver the malpractice protection you need at more affordable rates.
This depends on the employer and your contract. If your contract stipulates that you are responsible for paying your tail, you should contact us immediately. If your employer is responsible, just be sure you get proof of coverage in writing before parting ways. For your next job, be sure to factor the cost of the tail into the equation so you’re not surprised by an unforeseen expense.
Tail insurance costs approximately 200% of the expiring claims-made premium. For example, if you pay an annual premium of $40,000, your tail coverage would cost around $80,000. Since rates vary widely by specialty, location, and individual risk factors, we recommend you contact us for a personalized tail evaluation. While many doctors accept the first tail quote they are given, those who work with MEDPLI often save thousands of dollars.
Tail coverage term lengths vary from one year to an unlimited term. Common terms are for 2, 3, and 5 years. We recommend purchasing a tail that endures beyond your state’s statute of limitations for submitting a malpractice claim. Most physicians opt for unlimited-term coverage when available, even though shorter-duration tail coverage is often less expensive.
Without tail coverage, a physician can be financially liable for future claims from patient care during the lapsed claims-made policy period. This liability can range from thousands to millions of dollars, based on the severity of the claim.
Tail insurance should be secured by the last day of the active claims-made policy. Often, the incumbent carrier offers a 30-day window after the policy lapses for a doctor to exercise the option to buy their tail policy. We recommend that you pursue standalone quotes before accepting an incumbent offer. Starting that process when you decide to change employers will provide more opportunities to compare quotes and secure the best rate. Reach out to MEDPLI immediately if you will be leaving employment soon or have already ended employment because this matter is highly time-sensitive.
Each medical specialty has its own risk profile from an insurance standpoint, requiring specialized tail insurance. A policy should reflect the precise circumstances of a physician’s practice. Doctors need to reflect all the professional services provided during the prior acts period during the application process, so the policy can match up to specific coverage needs.
Tail coverage protects doctors against any future claims that have yet to be reported.
Tail insurance covers any financial liability associated with a medical malpractice claim. This includes legal fees, expert witnesses, settlements, and/or any damages awarded to the plaintiff.
Tail Insurance, or Extended Reporting Period (ERP) coverage, is the mechanism that allows future reporting of claims that still need to be brought to your attention.
Remember, when a claims-made policy ends, it must be renewed with prior acts coverage, or a tail must be purchased. If you have claims-made coverage and do not buy tail, there is no protection for medical liability claims after the policy lapses.
No, occurrence coverage does not require a tail. Tail coverage is only necessary for claims-made, or claims-paid, forms of malpractice insurance.
With an occurrence policy, doctors are protected from any incidents during the policy term, no matter when the claim is submitted.
- Occurrence coverage provides lifelong coverage and is more expensive upfront.
- Tail coverage can offer lifelong protection if a doctor selects an unlimited-length term. While not all states or practice types qualify for occurrence coverage, tail coverage is available to all physicians who have active claims-made coverage. The duration of the tail coverage available depends on the carrier and specific risk.
Tail coverage is an endorsement, or standalone policy, that protects against any future claims that occurred during the doctor’s previous employment.
Prior Acts coverage is not a standalone policy but can be included in a claims-made policy. It modifies the retroactive date to ensure the doctor’s “prior acts” at a previous employer are still covered. However, this option is not always available.
Yes, “prior acts” and “nose” are interchangeable. These terms refer to a policy that covers the new coverage going forward and the prior period. Since this is very important, you should only trust an experienced medical malpractice insurance broker.
Instead of buying a tail, physicians can opt to maintain prior acts coverage which extends back to the retroactive date of the claims-made policy, or they can renew the current policy with retroactive coverage. However, new employee contracts often prohibit these options to avoid assuming risks from the physician’s previous employer. Additionally, the former employer’s contract might require a true “Tail Policy” rather than including nose on the new policy, since tail is final and prior acts coverage must be maintained year after year.
Whether or not you need to buy tail depends on your situation – contact a MEDPLI Insurance Broker if you have any doubts after reading this. With claims-made insurance, you need to ensure you have prior acts coverage on the new policy or you will need tail. If you are considering changing carriers, you need to make sure there are no gaps in coverage.
You need to obtain prior acts coverage back to your retroactive date when changing carriers, otherwise you will need tail.
MEDPLI provides medical professional liability insurance solutions to doctors and healthcare entities across the United States. To inquire about your unique situation, contact info@medpli.com and tell us about you and the problem you need to solve. Even if we can’t help you, we may have resources that can help. We are all in this together!
Tail insurance allows the insured to report claims that are not yet made while the claims-made policy is in force (since claims-made responds when the claim is made as opposed to when the incident occurs). Tail is the mechanism that allows you to report claims to your insurance company after your claims-made policy expires.
When your claims-made policy expires, you will renew with prior acts or you will need tail coverage to continue to be protected.
Tail insurance can be purchased by policy endorsement or as a standalone tail policy. MEDPLI specializes in providing standalone tail coverage to physicians when they are switching jobs (Tail insurance for doctors changing jobs), or making other changes that require tail coverage.
Claims-made insurance policies respond to claims based on when the claim is first made alleging malpractice. Claims-made is the most common form of medical professional liability insurance policy in the USA. It is different than occurrence form coverage. Occurrence form, in contrast, responds to claims based on when the incident occurs.
Example to illustrate the difference between claims-made and occurrence:
Dr. Smith has claims-made coverage with a 7/1/2014 retroactive date. He operated on Patient Doe in 2015. Patient Doe filed a lawsuit in 2016 alleging malpractice against Dr. Smith. Dr. Smith’s 2016 policy is the one that responds to this claim, because claims-made coverage responds based on when the claim is first made.
Dr. Smith has occurrence coverage (no retroactive date with occurrence). He operated on Patient Doe in 2015. Patient Doe files the lawsuit in 2016. Occurrence coverage responds to claims based on when the incident (the operation) occurred. In this case, the policy that was in force during the operation in 2015 responds to the claim. Occurrence form of insurance is more familiar to most people since home and auto insurance are written on occurrence form.
Claims-made is the most common form in medical professional liability insurance. Claims-made should not be confused with claims-paid coverage.
Tail insurance generally costs 200% of the expiring claims-made premium. If you are paying $40,000 per year, the tail insurance would cost around $80,000. This is a general rule of thumb, which could be different depending on your unique situation. To get your tail insurance estimate, contact your MEDPLI Insurance Broker.
You are not alone. Remember that contract you signed with the hospital or group? Did it specify who would pay for the tail coverage when you part ways? Is it their bill to pay? Yours? Split it 50-50%? If you are responsible for paying the bill, you can decide where to buy your tail. MEDPLI helps doctors lower their tail costs by shopping the standalone tail marketplace when they change jobs. Recently, we helped an Illinois Obstetrician save $30,000 on her tail. It pays to have a MEDPLI Insurance Broker!
“Within the scope of your employment” is an important phrase to remember when considering new practice opportunities. If your employer has provided you with malpractice insurance, it is only good for claims arising within the scope of your employment. If you provide medical services outside of your employment, you will need a separate policy. MEDPLI regularly helps doctors with this situation.
Your limits of liability are the maximum amount your carrier will pay out under your policy. Most doctors carry $1,000,000 per claim/$3,000,000 aggregate limits for professional liability. This means the most the carrier will pay is $1,000,000 per claim, not more than $3,000,000 in total.
In many cases, you will have payment options including quarterly or monthly, and often will have the option to set up automatic recurring payments.
Your retroactive date is a critical component of your claims-made policy. It stays the same as long as you renew your coverage, so even though your effective and expiration dates change each year, your retroactive date should remain the same. Your retroactive date is the earliest date you are covered under your claims-made policy.
For example, let’s say your retroactive date is 7/1/2014. Your policy will not respond to claims when the incident occurred before 7/1/2014.
If that occurred after 7/1/14, which are reported during the policy period. If you did a procedure on a patient prior to your retroactive date, and were later sued, your policy would not cover it. See “The importance of your retroactive date” article.
If you have a retroactive date, you have claims-made. If you do not have a retroactive date, you have occurrence. Claims-made policies are more common in the US medical professional liability insurance industry.
You don’t have to wait. In most cases, you can start the new policy while your old policy is still in effect, then cancel the old policy for a refund after the new policy is in place. Your effective date will change, but your retroactive date remains the same, ensuring no gaps in coverage. It’s recommended that a MEDPLI Insurance Broker assist you when you are considering switching companies. See “switching carriers mid-term.”
The premium you pay for malpractice insurance depends on many factors including specialty, practice location, claims experience, and others. The higher the risk, the higher the premium. In order to get the best terms and pricing for your needs, you should work with an independent broker with access to multiple carriers. MEDPLI can shop the market for you. Click Here to get started.
Medical malpractice insurance provides asset protection to doctors in the event they are sued for professional negligence (errors or omissions). Another term used for this type of coverage is Medical Professional Liability Insurance, the inspiration for the MEDPLI name. What is medical malpractice insurance?