If you are a doctor or another health care provider, you will want to understand the options available for medical malpractice insurance so that you purchase the proper coverage. Some policies are known as claims-made policies, while other policies are known as occurrence-made policies. A claims-made policy covers a malpractice claim if it was in effect both when the alleged malpractice happened and when the claim was reported. (Sometimes the policy will define reporting the claim as filing a case in court, but not always.) To supplement a claims-made policy, a doctor may purchase tail coverage or nose coverage. Tail coverage applies to claims arising from alleged malpractice that occurred during the life of the policy, even if the claim was not made during the life of the policy. By contrast, nose coverage applies to claims arising from alleged malpractice that occurred before the policy started, as long as the claim was made during the life of the policy.
Occurrence-made policies have a broader scope. Under an occurrence-made policy, a medical provider will be insured for any alleged malpractice that happened while the policy was in effect, even if the claim was not reported during the policy period. This type of policy will provide coverage even if the doctor has a new insurance policy at the time of the claim, or if the doctor is no longer insured.
Limits on Coverage
Insurers limit both the amount that they will pay for a single claim and the total amount that they will pay for all claims during a certain time period, usually a year. These limits are known as per-occurrence limits and aggregate limits, respectively. Coverage limits may be calculated by referring to typical verdicts and settlements in medical malpractice cases in the region where a doctor practices. They also may depend on the prevalence of medical malpractice litigation in that area. Sometimes coverage limits will apply to attorney fees and court costs. This means that a doctor may be personally liable for a greater amount of a verdict or settlement.
Defining a single claim can be less straightforward than it sounds. Sometimes multiple occurrences that are related may be considered part of the same claim, such that the per-occurrence limit applies to all of them.
Group Coverage and Personal Coverage
A medical practice may buy a policy that covers all of the doctors, nurses, and other staff members who work there. Even if a group policy covers them, certain members of the staff may want to purchase individual coverage, which involves paying a separate premium. Also, a doctor may want to purchase an individual policy if they practice as part of a group for some of the time and individually for the rest of the time. Or they may want to purchase an individual policy so that they can stack the coverage on the group policy.
A policy will not apply to criminal acts by health care providers, such as sexual abuse of patients or intentional misconduct during surgery. It also may be voided if the doctor provided false or misleading information on the application.