medical liability
by Kelly Reed


Most Medical Professional Liability policies are written as “Claims Made coverage” today.  There are other options in the marketplace including Occurrence coverage and Modified Claims Made coverage.  Claims Made policies can offer benefits including reduced costs early in a physician’s career, flexibility as your career progresses, but Tail Coverage should always be top of mind.   The following items will help you navigate the benefits and concerns of a Claims Made policy.

  1. Substantial Savings – Claims Made Medical Malpractice policies typically “step up” the premium from year 1 – Year 5 often called a mature rate.  Malpractice claims have a longer reporting pattern which allows for discounted pricing during the first five years the policy is in force.
  2. Flexibility in Liability Limits – The recommended limits of liability for a physician today varies depending on specialty, litigious nature of the county you practice in, your claims history as a physician, and your states efforts in Medical Malpractice tort reform.   A Claims Made Medical Malpractice policy allows you to increase or decrease your limits of liability as your progress throughout your career.
  3. Tail Coverage – Will I need to buy tail coverage when I exit my practice?  This question is and should be asked whenever a physician purchases coverage.  As you could guess, the answer is it depends.  Most commercial Medical Professional Liability policies are similar in that they offer “Free Tail” provisions if you meet certain requirements. These could include:
  • Death or Permanent Disability – Most Medical Malpractice policies include a condition that the insurance carrier will provide “tail coverage” in the event of a death or permanent disability at no cost.
  • Retirement – Most Medical Malpractice policies will provide a “Free Tail” upon the permanent retirement from the practice of medicine.  In order to qualify for this benefit, the policies typically say you need to be insured by that carrier for X number of years consecutively and be at least X number of years old.
  • Other – While not always common, some Medical Professional Liability companies will offer an additional benefit.  For example, if a physician were to be insured for 10 consecutive years by the carrier and be 65 years or older the carrier will provide a free tail should the physician cancel the policy.   This is unique in nature as it does not require the physician to permanently retire from the practice of medicine.

Overall, when considering a Claims Made policy, I recommend consulting your advisor.  With proper planning, these policies can offer substantial savings and flexibility over other types of policies offered in the Medical Malpractice marketplace.  To learn more about the Medical Professional Liability Solutions that VAST can provide, contact Kelly Reed | 906.315.7227 |

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