When you think of insurance, the first things that come to mind are those related to home, auto or personal medical insurance. In case of an accident or illness, people usually get the help they need and then file claims. If coverage is current, then insurance carriers investigate and pay the claims. Malpractice insurance is a bit different from these types. Health care providers can choose from three distinct types.
Gracey-Backer offers a brief guideline on the different types of malpractice insurance policies:
- 1. Claims Made:
- This is the most common type of coverage handed out. For this to work as intended, doctors and patients have to be part of the same network of carriers. If a doctor switches carriers, policies will not cover additional claims despite the fact that the malpractice occurred under a specific policy. Premiums are usually low as they are based on current experience and not future liability.
- 2.Prior Acts:
- Doctors who choose claims made coverage would also need to pick an additional policy to cover incidents that occur when a specific policy is in place, but not reported until much later. There are instances when reports are filed after policies are cancelled. This could occur if a doctor retires, has a disability or just changes companies. Malpractice claims are made years after the incident has occurred and supplemental coverage is necessary to meet claims that incurred but were not claimed. This is also called tail coverage. It is bought from the company that holds the cancelled policy.
- 3. Occurrence Coverage:
- These policies are similar to the traditional home or car insurance ones. They cover incidents which take place when the policy is still in force, regardless of when the claim gets filed. Claims are paid even if the policy is cancelled. One major advantage of buying this kind of insurance is that it eliminates the need for supplemental insurance coverage. This is pricier, as it is difficult to predict future liability and claims.
It’s important for doctors to have reliable malpractice insurance as it protects them from getting sued by patients for negligence and wrongdoing. Insurance companies pay out claims which are awarded to patients, just like all other insurance policies. There are many different policies and premiums depending on the doctor’s specialty and location. It’s important to get a combination of policies and have adequate coverage to avoid going out of business.