Selecting the Right Malpractice Coverage: 3 Best Practices

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If you own a medical practice, you likely enjoy the benefits of being a white coat entrepreneur. You can set your own schedule and focus on delivering the best care for patients in your community.

Unlike practices that are part of hospital systems, you are much more involved in terms of the decision-making process when it comes to purchasing insurance to safeguard your assets.

If you are evaluating your insurance options, it’s especially important to take a closer look at the malpractice coverage offered by each insurance provider. If you do your homework up front and consult with the agent regarding your specific needs, you can protect your business from unforeseen financial risks.

Deciphering Medical Malpractice Insurance Policies

When researching your insurance options, here are a few of the most important terms you need to know.

(1) Claims Made versus Occurrence policies.

One of the most important points to clarify when evaluating different policies is to determine if it is “Claims Made” or “Occurrence”. Occurrence form coverage responds to events that occur during the policy period regardless of when the claim is presented. The far more complex claims made form addresses only claims that are made during the policy period and can respond to claims where the triggering event (the accident, wrongful act or injury) occurred prior to the policy period.  Coverage is provided for claims which occurred prior to the policy period only if there is a retroactive date on the policy.  The critical factor with claims made policies is maintaining continuous coverage.  Without continuity, the insurance carrier will not provide retroactive coverage.  Your agent can help you to understand these complicated concepts and which coverage form is best for your practice.

(2) Consent to Settle Clause

This provision in your policy specifies that your carrier needs your written permission to settle a claim. Having this clause within your policy gives you more control in a court of law, though policies that don’t include this specification often have lower premiums. If in doubt, talk to your insurance agent about what makes the most sense for you.

(3) Defense Costs “Inside” or “Outside” Policy Limits

Defense costs inside the limit of liability means that all defense costs (attorney’s fees, cost of  investigation, etc) are deducted from the policy limit which will erode the limit of coverage available to you to pay for any damages awarded by a ruling. With outside the limits, separate limits are available for legal defense costs and court-awarded damages. So, the cost of defending your case does not reduce your policy limits available to pay claims.

If your practice is facing a lawsuit, the type of malpractice coverage you’ve chosen will be critical in determining your potential financial responsibility.

Insurance for Medical Offices

Founded in 1946, our independent Knoxville insurance agency protects practitioners from income loss and damage to your premises, as well as offering medical malpractice programs. We also provide office overhead and disability policies that help you cover day-to-day practice costs if a disabling injury or health condition prevents you from returning to work. Dial 865.524.0785 to request an estimate or fill out our online form and an insurance professional will contact you to discuss your policy needs.

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Author: Brandon

Farragut High Grad, Ole Miss Rebel, Certified Insurance Counselor – CIC, Specialty Insurance Lover, Past Outdoor Insurance Underwriter, Co-Founder successes – Young Professionals of Knoxville, Knoxify.com, 2011 Dogwood Arts Festival Co-Chair. Lucky husband and dad to 3 sweet girls.

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