Occurrence Professional Liability Insurance vs. Claims Made Liability Insurance

Medical Malpractice Insurance is a  specialized type of professional liability insurance that covers physician liability arising from disputed services that result in a patient's injury or death. ...

Malpractice insurance is usually available through traditional insurance carriers or from a medical risk retention group.

A Risk Retention Group is an organization of medical professionals organized to provide liability insurance (sometimes sponsored by single specialty medical associations or county medical societies).

Additionally, some large medical systems may be “self-insured;” .. Which means that these physicians (members of the large systems) purchase their insurance from a medical liability trust fund – which is designed to defend and pay for malpractice claims and any resulting judgments against their physicians.
Although it is possible for smaller medical groups and practices to self-insure, there are significant legal and business obstacles that make this a difficult option. Generally, there must be a large number of physicians facilities and mid level providers working together in order to justify the risk of handling claims on their own.
The Doctors Insurance Agency specializes in individual and group malpractice coverage plans.

The optimal type and amount of insurance you need to meet the contracting entity’s insurance minimum requirements.
And, it must be (or should be) enough to cover personal asset protection.

Claims-Made Insurance vs. Occurrence: It is important to understand the two basic types of malpractice insurance: "claims-made" and "occurrence."
A claims-made policy will only provide coverage if the policy is in effect both when the incident took place and when a lawsuit is filed. This requires that coverage must extend for a significant period of time to provide adequate protection since a considerable amount of time may elapse between when an incident may have occurred and when a claim is made. Because of this, some claims-made policies are written to provide “tail” that extends coverage for a set amount of time (such as five years) or indefinitely after a policy ends.

If not offered as part of the original policy, tail coverage may also be purchased. The cost of tail insurance is typically a one-time assessment that can be as much as 1.5 to 2.5 times a typical annual malpractice insurance premium.

Tail coverage, however, is important in situations where you have been covered with a claims-made policy but are changing insurance carriers, moving to a new position, or are retiring, to ensure continued malpractice coverage during these transition times for incidents that may have occurred in past years.
The costs of tail coverage may be covered by your previous practice to ensure adequate protection of their group assets, or by your new practice either as a benefit or an inducement to join the group. Tail coverage may be an appropriate item of negotiation with a prospective new practice.

Occurrence policies differ from claims-made insurance in that they cover any claim for an event that took place during the period of coverage, even if the claim itself is filed after the policy lapses. In general, this type of policy does not require tail coverage. This type of insurance is usually significantly more expensive and less frequently offered by employers.

If you are entering a private practice, remember that in addition to medical liability claims, medical practices also face potential claims associated with other medically-associated risks such as cyber liability and regulatory requirements such as compliance with the Health Insurance Portability and Accountability Act (HIPAA). Some medical malpractice policies may cover these types of exposures, these are ‘sub limited within the policy. If not, separate policies to protect against these risks are usually available.

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