- Medical Professional Liability Insurance (MPLI) – Starting with the fundamentals, this is the technical name for what is commonly referred to as Medical Malpractice Insurance. It is liability coverage particularly tailored to the needs of medical professionals.
- Claims Made Policy – A type of MPLI policy in which a claim is covered only if the incident that triggered the claim, and the claim itself occurred within the policy period. Each time the policy is renewed the policy period is extended back to the date the policy was first opened (the retroactive date). If the policy is cancelled or non-renewed and a claim arises from an incident that occurred during the time that the policy was active the claim will not be covered under this type of policy, which is why it is usually supplemented by a tail policy.
- Occurrence Policy – A type of MPLI policy in which any claim arising from an incident that occurred during the active policy period is covered, regardless of when the claim is actually made. Unlike a Claims Made Policy, and Occurrence Policy will cover claims even after the policy has been cancelled or non-renewed if the incident that led to the claim occurred while the policy was active. Occurrence coverage is generally more expensive than claims made coverage, but it also does not require supplementation with a tail policy.
- Extended Reporting Period (ERP) – Commonly referred to as tail coverage, ERP policies provide extended coverage from the retroactive date of a claims-made policy through the date of cancellation. Tail coverage protects you from claims that arise after the cancellation or non-renewal of a claims made policy but were caused by an incident that occurred during the coverage period.
- Limits of Liability – These are the maximum amounts that malpractice policy will cover. Typically you will see two numbers (e.g. $1M/$3M). The first number is the limit for an individual claim and the second is the limit for the policy period in total.
- A.M. Best Rating – A.M. Best is the most widely trusted and well-regarded rating agency in the medical malpractice industry. An “A” rating or better is a good sign that a carrier has a good reputation and history.
- Stock Company – An insurer that functions as a traditional company owned by shareholders and run on a for profit basis.
- Mutual Company – An insurer that functions as a traditional company but is owned by the physicians it insures. Insureds may receive dividends or be required to pay an assessment from time to time depending on the financial strength of the company.
- RRG – An insurer that functions as a non-traditional company formed by doctors with similar needs and engaged in similar or related business who purchase insurance together. Often RRGs are formed by groups of doctors in a particular specialty.
- Endorsement – An supplement to a malpractice policy that modifies the original terms of the policy. For instance, when a doctor is added to a group policy or taken off this is accomplished through an endorsement.
- Loss-free-credit – Also known as a “claims-free-credit,” this is a discount that may be offered by an insurer to insureds who have no claims, or who have a better than average claims history.
- Part-time Discount – A discount offered by insurers to those working part-time on the basis that they present less risk than someone working full time.
- Risk Management – Risk management refers to intentional and prescriptive measures taken to reduce the risk of medical malpractice claims. Often insurers will offer discounts or credits to insureds who take risk management classes or meet other risk management benchmarks established by the insurer.
- Consent to Settle – A feature of many insurance policies that stipulates that an insurer cannot settle a case without the consent of the insured. Most policies have this feature, however, there may also be a Reduction for Refusal to Settle clause that further stipulates that if the insured refuses any settlement offered the insurer is only liable up to the limits of the proposed settlement that was refused.
