Medical malpractice insurance policies are all about details. This type of insurance, possibly more than any other, requires a physician, office manager or insurance broker who fully understands the product when compared to a simpler product such as life insurance. Knowing some of the finer details of medical malpractice insurance can not only keep your premiums lower, but more importantly, can help ensure the policy will be there when it is needed most: when a claim comes in against the insured. Here is a list of 5 things you need to know before you purchase a medical malpractice insurance policy.
1. What type of policy are you buying and what are the long term implications of each?
What type of policy do you need? Occurrence or claims made? If you are starting a private practice for the first time, which type of coverage is best for you? While both will keep you equally protected, each type has its advantages and disadvantages and will affect your cash flow at different times throughout your practice. Make sure you think about things like the cost of the tail coverage, the portability of coverage and premium comparison for cash flow in the first 5 years.
2. Underwriters are people too!
Underwriters work at every insurance company and their job is to do two things: first, to decide whether or not to insure you and second, to determine your premium. When you turn in an application, make sure it is as complete as possible and written legibly. Also make sure to attach all the documents requested on the back of the application. Most importantly, be straight forward, especially when it comes to your loss history. In most cases, official loss history from your previous carriers is required by the underwriters anyway. The underwriters’ will look at dozens of applications every day and ultimately they determine your premium. They must determine the risk a practice presents to the insurance company based on just a few documents and the more information they have, the better they can do their job. A more happy and informed underwriter is a more flexible underwriter.
3. Your broker is your friend.
Think of your broker as your advocate who works on your behalf to secure the lowest premium and who can help get you what you need for your practice. Brokers do not work for a specific insurance company; rather they work on your behalf to find you the best rates possible. It is important that your broker knows as much about your practice, procedures and prior as possible in order to navigate the market and find the carrier that will serve your needs the best.
4. You aren’t the only one who needs coverage!
Don’t forget about your Nurse Practioners, Physician Assistants or your corporation. All of these can be sued if something happens in your practice. If you have NP’s, PA’s or other ancillary providers, make sure they are getting covered too! Corporations can also be sued, so make sure your corporation is covered too! The next decision you will have to make is whether or not these entities will have separate or shared limits of liability. This means will both you and your NP share $1,000,000 worth of coverage in a claim, or will you each have $1,000,000 individually when a claim comes in?
5. Use a reputable insurance company!
Make sure the medical malpractice insurance company is financially strong with the probability of being around if you have a claim. Contrary to popular belief, you do not need to be an accountant to have an understanding of your carrier’s finances. Most carriers release an annual report and the NAIC provides financials for most carriers online. Your broker can help you understand the different financial strengths and weaknesses between carriers. Be sure to ask if your carrier has reinsurance, which is in essence insurance for the insurance company to protect against unexpectedly high losses. Does the insurance company, or the reinsurance company have an AM Best or Demotech rating? But it isn’t ALL about finances. It is also important to work with carriers (and brokers) with a long track record of doing the right things for the physicians they insure. At the end of the day, honesty and integrity on the part of both your broker and the carriers he or she represents, should be one of your biggest factors when making a decision before you purchase your next medical malpractice insurance policy.