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Students Should Start Investigating Medmal Insurance Now
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As a student, you may think your medical malpractice coverage is something you don't need to start thinking about until later. While it is true that you probably won't find yourself making medmal coverage decisions until after you complete your residency, the subject can be so complicated that it is a good idea to start understanding some of the basics now, so that you don't find yourself overwhelmed when the decision time arrives.
Because the relationship with your professional liability carrier is long-term, you need to thoroughly understand how that relationship is defined. If you don't, you may sign up for a policy that isn't the best fit for your needs, or worse you may not understand your coverage or your rights until it is too late. Below are some questions you should ask when choosing a carrier:
Occurrence or Claims-Made Coverage?
There are two main coverage types: Occurrence and Claims-Made. Many carriers only offer claims-made coverage, so they may not inform you that you have a choice. Medical Protective offers both. Click here to learn more.
If you renew your claims-made policy with your current carrier, your coverage will continue uninterrupted. However, if you move to another professional liability carrier or your claims-made coverage ends, to remain protected, you will have to either obtain a reporting endorsement from the prior carrier (often referred to as "tail" coverage), or purchase "prior-acts" coverage from your new carrier (also known as a "nose.") A reporting endorsement allows you to report claims based on medical incidents that took place between the retroactive date and policy termination date, but are first made after the policy coverage terminates.
However, new carriers may consider the financial stability of your prior carrier. If the prior carrier is considered financially unstable or insolvent, the new carrier may be less willing to extend coverage for any prior acts. Since this could impact your insurability and possibly create coverage gaps, it is important to purchase coverage from financially stable companies. Remember: coverage (including extended reporting endorsements) is only as good as the long-term financial health of the carrier who wrote the policy.
As with the policy itself, you need to review the language of any reporting endorsement offered. Understand your right to obtain an offer of tail coverage, how the tail premium (if any) will be determined, and the length of time you are given to report claims. If your prior carrier is unable or unwilling to provide you with a "tail" reporting endorsement, you will have to seek coverage for these "prior acts" through your new carrier.
Five questions to ask yourself before selecting a malpractice policy type:
- Do you want the option to move to another state(s) now or in the future?
- If you plan to retire early, is there a chance that you may want to return to practice again?
- Do you think you'll ever want to take extended time off to care for a child or to participate in a mission trip or any other reason?
- Are you in a partnership or group with other physicians?
- Do you or do you ever plan to practice in a specialty more likely to be sued (i.e., obstetrics, surgery, neurology, anesthesiology, etc.)?
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Other Questions to Consider:
Is your premium guaranteed?
Some professional liability carriers establish premiums at the beginning of the policy period and, absent any change by you during the policy period, are guaranteed not to increase during the policy period, regardless of any adverse loss development experienced by the company for that policy year. Other professional liability companies are "assessable" companies. This means that the premiums paid by policyholders at the beginning of a policy period are estimates only. If an assessable company has losses or expenses that exceed the premiums collected, they can collect extra premium (i.e., assessments) from policyholders — possibly even after your policy period ends or your policy is canceled.
Can your carrier settle a claim without your consent?
How much control does the policy allow an individual physician to have when making the decision to settle a claim? After all, settling a claim involves more than money—it can impact your reputation, your practice and even future insurability. Shouldn't you have final say?
Do you have a voice in your defense?
Who decides if the claim will be presented to a jury? An arbitration panel? The insurer? Know what rights, if any, the policy gives you if settlement is considered.
Is there a "hammer clause?"
If you object to settlement and the trial verdict is higher than what you could have settled for, you could be personally liable.
At Medical Protective, we believe you should have a voice in your defense and the right to refuse settlement — with no hammer clause
What triggers coverage?
Whether you have a claims-made or occurrence policy, you need to understand what triggers coverage. Does the claims-made policy, for example, allow you to trigger coverage by reporting medical incidents you reasonably believe could result in a claim? If not, when can you trigger coverage? Do you have to wait for a formal demand for damages or lawsuit before the policy responds?
What happens after the policy is sold?
Does your professional liability carrier go beyond the policy to help you improve patient safety and reduce risk? Do you have access to the tools and resources necessary to support those efforts? Effective risk management is critical for all healthcare professionals. It requires extensive knowledge of the myriad of issues affecting today's providers, and helps you find creative answers and meet the most pressing challenges.
What about policy cancellation or modification?
What if there is a change to the policy terms or conditions? Will you receive advance, written notice? Will you have the opportunity to examine your options and secure alternative coverage if necessary?
If you object to settlement and the trial verdict is higher than what you could have settled for, you could be personally liable.