Below is a list of a few commonly asked questions that are important for physicians to consider when purchasing malpractice insurance. Be sure to ask questions so that you understand how your malpractice insurance policy functions.
1. What is an independent insurance broker or agency?
An independent agency represents the buyer, rather than the insurance company, and helps to find the client the best policy by comparison shopping. Malpractice Insurance Agency is an independent broker who has access to most of the major insurance companies.
2. What is a Claims-Made malpractice insurance policy?
Under claims-made malpractice insurance policy, coverage is triggered by the date you first became aware of the possibility of a claim and/or a claim is actually made against you, and when you notify the insurer of your knowledge of the claim or potential claim. The insurer’s policy that is in force on the date you became aware and give notice is the policy upon which the insurer must defend and settle the claim. Premiums for a claims-made policy start out lower and increase every year until they reach a mature rate typically in the fifth year of a contract.
3. What is an Occurrence malpractice insurance policy?
Coverage will respond to incidents arising from the coverage period - regardless of when those claims are reported. This policy automatically protects you both now and in the future for any incidents that occurred while you were a policyholder. Premiums remain the same for as long as the policy is in force.
4. What is a "Tail" or Extended Reporting Coverage?
Tail coverage is a supplemental insurance that covers incidents that occurred during the "active" period of a claims-made policy but are not brought as claims against an insured, nor reported to the insurer, by the time the claims-made policy has been terminated. Premiums for tail coverage can vary from one-time fee of 150-250% of the prior year’s annual premium. Some companies will offer a free tail at retirement, subject to certain conditions.
5. What happens when I decide to retire or if I die or I am disabled and have claims-made coverage?
A number of insurers provide, some as optional coverage, 100% premium waiver for "tail" coverage. The 100% premium waiver of "tail" coverage, in many instances, is contingent upon having continuous coverage with the same insurer for a certain number of years (i.e., 3-5 years). Some insurers also offer discounted retirement "tail" coverage if you have less than the required number of years of such coverage for the 100% premium waiver. You should check with your agent or insurer for the availability, premium and specific policy provisions.
6. What is a retroactive date?
Generally, the retroactive date is the date in a claims-made liability policy, which triggers the beginning period of insurance coverage. If such date is shown on your policy, any claim made during the policy period will not be covered if the loss occurred before the retroactive date.
7. How are the premiums determined for a malpractice insurance policy?
Malpractice insurance premiums are based on a variety of factors such as medical specialty, procedures performed, claims activity, risk location, and how many hours per week the physician is working. A medical malpractice insurer is not prohibited from establishing reasonable classifications of risks and premium charges based upon the relative risk associated with practice in a particular specialty.
8. Are there discounts available when purchasing malpractice insurance?
Yes, some insurance companies offer discounts to physicians who are new to practice or have no claims history. Speak with a sales representative to see if you are eligible for a discount - 800.217.4020.
9. Will I have the option to switch carriers in the future?
Yes, every year our staff will help re-evaluate your situation to make certain you have the best plan available to you. With tort reform changes in many states, it’s important to make sure you are getting the best rates.
10. Does the insurance company have the option to cancel or non-renew my policy?
Acceptable reasons for cancellation or nonrenewal of medical malpractice policies have been:
- Nonpayment of premiums,
- Mutual consent of the parties to the contract of insurance,
- Fraud or material misrepresentation in the application for insurance or renewal thereof,
- The insured's license or registration has been subject to a restriction, suspension or revocation during the policy period,
- Discovery of willful, reckless or illegal acts or omissions by the insured that increase the hazard insured against,
- Determination by the Commissioner of Insurance that continuation of the policy would violate or place the insurer in violation of the law.
If you have additional questions, please call to speak with a representative directly at 800.217.4020. Our friendly and experienced staff is eager to hear from you and is available to answer all of your malpractice insurance questions. You can also email our customer service department at info@malpracticeinsuranceagency.com.
