Medical Professional Liability Coverage
When choosing a malpractice insurance carrier, several issues should be discussed prior to making a decision. Some of these include:
- Ability to choose own attorney
- Point in a claim situation when legal representation is provided
- Choosing occurrence coverage vs. claims made coverage
- Consent to settle
- Limits of liability
- Risk management services
- Cancellation terms
- Premiums
Hospitals usually require limits of at least $200,000/$600,000. However, limits of at least $500,000/$1,000,000 are recommended.
There are two types of policies:
Occurrence Medical Professional Liability Coverage
This policy defends and pays damages on any claim for damages, at any time filed, based on professional services rendered by the insured, or any other person for whose acts or omissions the insured is legally responsible, in the practice of the insured’s profession during the term of the policy.
Claims Made Medical Professional Liability Coverage
Initially, a Claims Made Malpractice insurance policy costs less than an Occurrence Malpractice insurance policy. Premiums are paid in steps beginning with step 1, and the premium increases annually until they top out at step 5. (what are these steps?)
Claims under this type of policy must be presented during the policy period in order for coverage to apply. When canceling Claims Made malpractice insurance, coverage stops on the date of cancellation. For example, if a claim were filed two weeks after canceling the policy for services provided while the policy was in effect, the insurance company would not accept the claim unless an extended reporting endorsement or “tail coverage” had been purchased. An extended reporting endorsement covers the physician indefinitely. When canceling a Claims Made policy, a physician may elect to purchase prior acts coverage or “nose coverage” with their new carrier rather than purchase an extended reporting endorsement with their prior carrier. Prior acts means the new carrier will pick up the retroactive date (the date the physician first became insured with the prior carrier) so coverage is uninterrupted.
About the Author:
Wesley D. Millican, MBA, CEO and Physician Talent Officer of CareerPhysician Advisors, LP, and CareerPhysician, LLC, provides comprehensive talent solutions for academic children’s hospitals, colleges of medicine and academic medical centers across the nation. He possesses a longstanding passion for career development of all young physicians and serves as a go to career resource for training program directors and their residents and fellows. In continuing his commitment to the “future of medicine”, Mr. Millican speaks nationally at residency and fellowship programs. His Launch Your Career® Series is a proven resource for today’s residents and fellows and has served as a go to resource for program directors over the last 15 years.