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The cost of "tail" coverage can be anywhere from 100% to 250% of
your last years premium. Some carriers offer an alternative to
purchasing "tail" coverage called "Prior-Acts" coverage. Your
new carrier will pick up your original effective date of
coverage from the carrier you are leaving. "Prior Acts" coverage
generally costs about 107% to 117% of your premium with your new
carrier. An "Occurrence" policy covers you for incidents that
occur during the policy period regardless of when a claim is
reported. For example, if an incident occurred in 1997 but no
claim is made until 1999, the claim is covered by the policy
that was in effect at the time the incident occurred in 1997
even though this policy may have expired. Once an occurrence
policy expires, the policy limits remain available to cover
claims that are reported during the policy period as well as
claims that may be reported at any time in the future.
Q. What are some important features to look for in a malpractice insurance policy?
A. All malpractice policies are not created equally. Proper coverages come from
knowing
what to look for. The following are a few important clauses to be aware of:
1.
Consent to Settle – this clause requires the insurance company to obtain your
consent before they settle a case in your behalf.
2.
Free Tail – this applies to claims made policies only. The standard is a free tail
upon death disability or retirement. Without this you could be looking at paying a
large sum of money at retirement.
3.
HIV – disability benefit if you test positive for HIV.
4.
Administrative Defense – coverage if you have to appear before a medical board
5.
Vicarious Liability –
Q. What kinds of discounts are usually available when I buy malpractice insurance?
A. Discounts offered by insurance companies may vary, but most of them will adjust
your
premium if you are:
1. First or second year practitioner
2. Practicing part-time.
3. Have a good loss history
Also discounts such as risk management, board eligibility, hospital affiliation can be
applied. Some companies have special programs for associations, societies, medical
centers
and other large groups of doctors, so when you request a quote always let your agent know
if you are a member of any professional organization.
Q. Are all companies equal when it comes to defending claims?
A. No. No one likes to lose a lawsuit yet companies differ as to how vigorously they’ll
defend meritless claims or nuisance cases. For the most part traditional insurers have
always been settlement-oriented while carriers controlled by health care practitioners
have been defense-oriented. A carriers philosophy will determine whether controlling
defense costs are more important then taking a strong stance against meritless claims.
Q. How quickly can I get coverage when I need it?
1. The average length of time is about 30 days.
2.Upon special request, malpractice applicants with a good claims history can get
coverage within
7 days.
3. In special cases coverage's can be bound within 2 days
Q. What are typical premium payment options?
A. Most of the insurance companies offer two premium payment options: payment in full
or a finance option. If you choose to finance the policy premium you may select
between
monthly or quarterly installments after paying a 10 -25 % down payment. There is usually a
interest charge associated with financing your premiums.
Q. Do I need an Agent?
A. The advantages of having an agent are as follows:
1.
Agents generally have a much greater familiarity with the strengths, weaknesses,
and coverage’s of multiple carriers.
2.
A good working relationship with company personnel can help to facilitate most
coverage's and ensure a timely response to questions
3. Greater negotiating power to obtain the best coverage at the lowest costs
4. Streamlined application processes and claims handling for the insured
Q. What is the National Practitioner Data Bank and how does it affects me?
A. The National Data Bank was created in 1986. It collects and stores information
regarding
claims and sanctions against Medical and Healthcare professionals.
Credentialing departments of hospitals, professional societies, and state licensing
boards
may request information about a physician for the purpose of credentialing or professional
review process. Hospitals are required to query the Data Bank upon a practitioner’s
application for a position or for privileges.
Practitioners may request their file. However, a malpractice carrier may not request
information from the Data Bank. The carrier may however require the physician to
provide
a self-query as part of their application process.
Plaintiff’s attorneys may request information from the Data Bank but only when there is
a
filed (court) action against a hospital where the practitioner is also named, but only after
there is evidence that the hospital failed to make mandatory Data Bank query regarding
the practitioner in question.
Information obtain regarding the practitioner can only be used with respect to a legal
action against the hospital and not the practitioner. Civil penalties may apply to the
plaintiff’s attorney for further dissemination of the information obtained.
Medical Malpractice carriers are required to report all indemnity payments made on
behalf
their insured practitioner within 30 days after first payment is made.
HMO’s and other managed care organizations may require a practitioner to provide a
self-query from the Data Bank.
As you can see, there are many people looking into the background of practitioners
which
affects many areas of the practitioner’s business and livelihood. As such
practitioners
should periodically review their Data Bank files for accuracy regarding payments and
allegations.
Q. How do I know if a malpractice carrier is financially sound?
A. There are many factors to look for when determining if a malpractice carrier is
financially sound. However, you can get a concise overall picture of the company
through
an independent report from A.M. Best’s rating report. A.M. Best rates and
reports on the
insurance industry and is wholly independent. Facts to look for are the
following:
1.
Total Assets
2.
Capital Surplus
3.
Ranking of company by size
4.
Overall rating by A.M. Best
5.
Years in business
6.
Growth
The rating by A.M. Best will reflect the profitability and capitalization of the
company
You
will also have an overall view of the company’s financial strength and ability to meet its
obligations to its policyholders.
Armed with the above information you will be able to determine if the company will be
around to defend you in your time of need. If the company excells in the above
mentioned
criteria you will be reassured that it will have the financial where with all to hire the best
defense team, pay any judgments and continue to provide excellent coverage at an
affordable premium, year after year.
Q. What other basic coverage's, beside malpractice, should I look for?
A. Some of the basic coverage's for your practice can be an Office Package Policy and
Worker’s Compensation insurance. An Office Package policy covers General Liability
and
Office Contents (slips & falls, burglaries, fire, etc.). Worker’s Compensation covers injuries
to your employees sustained on the job and is generally required/mandated by state law.
Any health care practitioner who obtains a bank loan may also be asked to provide proof of
Disability Income and Life Insurance naming the bank as the partial beneficiary. As each
practice grows so does its insurance needs.
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