If you’re looking at a big shift in your professional life—if you’re moving, or mulling retirement, or simply switching practices—and are currently covered under a claims-made policy, it’s important to start looking into tail coverage right away. Tail insurance fills in the coverage gap caused by the cancellation of a claims-made policy. When a big change necessitates a change in malpractice coverage, you’re looking at the cancellation of your current policy. What you are purchasing with tail coverage is an extended reporting period—that is, an extended period of time that you are covered under your former policy, a period of time that extends past the cancellation date. Because of the typical lag between the time of patient care and the official claim of medical negligence, a cancellation in coverage can leave you vulnerable to a claim made by a patient you may have treated months ago.
It is very important to be proactive in looking at the tail insurance options your carrier offers. For one, these policies can be very expensive. Though a typical policy costs between 200 – 250%, costs can run as high as 500% of your current premium. This is no small sum on its own, but in addition many tail insurance premiums have to be paid in one lump sum. If you know your options ahead of time, you can find companies who will work with you to finance your premium into more manageable payments.
How much liability should you purchase, and for how long? And what are your options? Stand-alone tail policies, or tail policies purchased from a provider other than your current one, are becoming more popular among physicians because of their cost-effectiveness. How do these policies compare with the one offered by your current provider? You don’t want to be left purchasing tail insurance in a panic and either spending too much on already-costly insurance, or going the cheap route and leaving yourself insufficiently covered.
If you’re switching workplaces, consider the terms and options of your future policy. Does the hospital you’re moving to offer coverage? If so, does their policy offer “nose” coverage, which covers claims made for prior acts? Is there a term limit on this “nose” coverage? Often, hospitals will be self-insured, so it isn’t a given that you will be automatically insured under a new employer’s policy. These are important points to clarify, since any gap in coverage in which a claim is made can put you at serious financial risk.
An additional consideration if you are changing jobs is how tail coverage relates to your current hospital’s by-laws. Many hospitals will require their physicians to purchase a certain amount of tail coverage in their contracts. Failure to purchase such insurance can put you in a tricky situation if a claim is made for care given during your time with that hospital and, in addition to not being covered, you are found to be in breach of your prior contract. Be sure that you know exactly what your employer expects of you before moving on.
Being proactive with tail coverage can save you precious time and money that you should be spending on providing the highest quality of care for your patients. If you are looking ahead you will greatly increase the likelihood that you’ll find coverage that is right for you. Let eQuoteMD help you find a tail insurance policy that fits your unique needs today with a free quote today!
