Claims-Made Vs Occurrence – Types of Medical specialized Liability Insurance
In addition to homeowners insurance and auto insurance, medical professionals like physicians and surgeons often require medical specialized liability insurance. specialized liability insurance, also referred to as medical malpractice insurance, protects them against loss resulting from acts, errors or omissions in their performance of specialized duties.
When purchasing medical specialized liability insurance, physicians have two options-claims-made policies or occurrence insurance. Deciding between claims-made and occurrence may not always be easy, so it’s crucial to consider the important points that pertain to each kind of coverage to determine which will best suit your specific needs.
– Increased limit of liability – Physicians have the opportunity to increase their limit of liability, which determines how much their insurance company will pay to settle a negligence claim, and how many claims it would settle in one policy period. Considering that many doctors feel more comfortable with higher limits, an increased limit of liability can determine whether a claims-made policy is right for you.
– Discounted premium – Claims-made policies offer an initial cost savings for the first four years. This is because insurance companies understand that the chance of a claim being filed during the first few years is slight, but increases over time. The premium will little by little increase each year until the coverage becomes mature at five years and the odds of a claim being reported is much greater.
– Tail coverage – Since claims-made policies provide coverage only if the claim is first reported or filed during the policy period, physicians may need to buy tail coverage to protect against claims made after the policy period ends. Medical specialized liability claims often take a long time to develop, so a physician may not receive notice of the claim until years after the incident in question occurred. for example, if a physician retires, allowing his/her insurance policy to end, and a claim comes in six months later, he/she will require tail coverage to protect against the claim.
– Possibility of free tail coverage – There is a chance that the physician will not have to finance the cost of tail coverage, since many medical specialized liability insurance companies provide a free tail to a physician that has been insured with the same company for a stated period of time and has complied with the insurer’s provisions. Many insurance companies also offer free tail coverage to retiring physicians aged 55 or older who have been insured with them on a claims-made basis for the five years proceeding retirement.
– Coverage is long-lasting – Occurrence insurance protects against claims resulting from incidents that occur during the policy period, in spite of of whether the policy is nevertheless in effect at the time the claim is made.
– Avoid purchasing tail coverage– Since occurrence coverage is long-lasting, physicians can avoid the cost of tail coverage. Financing tail coverage can be quite expensive, costing up to 200% of the premium depending on the insurance company, so avoiding the cost of a tail may determine whether occurrence insurance is right for you.
– The insurance company’s financial stability must be obtain – Considering that occurrence insurance is long-lasting, it’s necessary to have complete confidence in your insurance company’s finances. Medical specialized liability insurance claims can take years to develop after an incident occurs, it’s important to feel obtain that your insurance company will nevertheless be in the position to protect you years after purchasing occurrence insurance.
– Limit of liability remains unchanged – Unlike claims-made policies, the limit of liability at the time of buy is the limit you will have when a claim is made, which is typically 3 to 5 years after the incident occurs.
There are many important points to consider when deciding between claims-made policies and occurrence coverage. Contacting a trusted specialized liability insurance agent is the best place to start.