When your policy is canceled or you have let it lapsed:
The question that you should be asking is: “Will your new Podiatry Malpractice Insurance
Policy cover you for claims stemming from prior services?”
This is Tail Insurance. These words define tail insurance: Insurance for claims presented in the future stemming from prior services (dating back to the ‘stated retroactive date’. Whether you are full-time or part-time, it is very important to continue uninterrupted chain of insurance.
The chain of insurance begins when you first incept your claims made professional liability insurance policy.
Effective Date becomes the Retroactive Date: Do not just cancel the policy and start fresh with lower premium. This will leave you bare and exposed to unprotected claims.
Retroactive Date: (and why it is so important)
This date, which initially is called effective date becomes your retroactive date of coverage.
When you are trying to restore coverage that has been canceled: it is important to make a decision whether you are going to obtain a new policy at a mature claims made premium. This is called converting from one carrier to another (usually driven by economics of either premium of company financial strength). Conversion means the new company is going to provide you with insurance for any claims stemming from services provided dating back to original coverage start date.
Buy Tail and Start again
Or, you might have to (due to employment, contractual reasons) have to purchase tail from your cancelling company. “Tail Coverage” is an extended reporting period endorsement, offered by a physician's current malpractice insurance carrier, which allows an insured physician the option to extend coverage after the cancellation or termination of a claims-made policy. The expense of tail is something that should be carefully considered. Tail is the expiring premium multiplied by a factor of 1.5 to 2.5 (depending on the length of the tail term).
If you purchase tail, you can then start your policy fresh, with no history, no coverage under the new policy for claims developing from prior services.
Regardless of the direction that you take; whether you purchase tail or look for a new policy with retroactive coverage, it is important to remember that claims happen.
Experience teaches that claims happen to good practitioners
I have been representing medical doctors, medical facilities mid-level providers podiatrists optometrists, chiropractors for over 20 years and I am often surprised at how often price is the primary driving factor when considering a new policy. The image above is to emphasize the fact that claims do happen and they do cost a lot of money. There is often a lag 3 to 5 years between the time the incident occurs to the time the check is written from the insurance company. Therefore, it is important to choose a company that is financed well so that it will be here to pay the claim in the future.
Look at more than one company. Consider well, financed risk insurance carriers if you have been non-renewed by your current insurance company. Careful selection can save you money and preserve the certainty that your claim in the future will be properly handled and paid.