Medical Malpractice Insurance policies can be confusing, and most allied healthcare providers are unsure whether to get an Occurrence or a Claims Made policy. The answer to this question really depends on your employer, your employment status, and your future career plans. First, a definition of each type of policy may be helpful:
Claims-made Coverage
A form of liability coverage that is triggered if 1) an event takes place and is reported after the retroactive date but prior to the termination of coverage, and 2) the claim is made against the Insured while the policy is in effect. A “Tail” or Extended Reporting Endorsement (ERP) must be purchased when the policy is terminated for prior acts to be covered.
Occurrence Coverage
Provides coverage based on when the accident or injury actually happens; thus, claims arising from injuries that occurred within a policy’s effective dates are covered by that policy, regardless of when the claim is actually made against the Insured or presented to the insurance company. A “Tail” (ERP) is not needed with an Occurrence Policy.
Why would employer, employment status, or career plans dictate which coverage an allied healthcare provider should choose?
Sometimes an employer makes the decision to add an allied healthcare provider to their own medical malpractice insurance. In this case you do not have a choice, and most physician policies are Claims Made. Typically, in this case, you would be added as an Additional Insured and covered as long as you are employed. If you leave the employer, you cannot take your coverage with you because it is not your policy.
Your employment status may influence the decision to get Occurrence or Claims Made coverage. If you are an independent contractor (1099), and you want the flexibility to work other places or think you might move on in a couple of years, you really need your own Claims Made policy. These policies are portable and cover your prior acts going back to your initial start date or Retroactive Date. No matter where you are employed, if a claim is filed against you, the Claims Made policy will provide coverage as long as it was filed after the Retroactive Date and the policy is active.
However, if your future career plans include going to work full time in a hospital setting, you should choose an Occurrence Policy. A hospital typically will not purchase an ERP (Tail) for new allied healthcare provider they hire. They will usually require the new hire to pay for their own ERP and just add them to their self-insured trust or medical malpractice insurance plan. An Occurrence Policy does not require a “Tail” and will save you a great deal of money when you go to work at the hospital.
The network of medical malpractice insurance experts at eQuoteMD can help you further understand the importance of choosing the right policy for your situation. We recently saved a Family Nurse Practitioner thousands of dollars by providing a Claims Made policy with Retroactive coverage for her prior acts, and she avoided having to purchase an ERP. Please give us a call or apply online for a free quote.
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