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.
Whether or not you need to buy tail depends on your situation – contact a MEDPLI Advisor 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 email@example.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 Advisor.
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 Advisor!
“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.
Do I need to wait until my current medical malpractice insurance policy expires before I switch insurance companies?
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 Advisor 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?