Medical malpractice insurance glossary.

Definitions of terms used in policies, quotes, applications, and claims.

A coastal highway curves past a MED-MAL 101 route sign

Policy forms

certificate of insurance Also called: COI, certificate of coverage ¶: A summary of the insurer, policy number, limits, and dates. A certificate describes coverage but does not change the policy.
claims-made policy Also called: claims-made coverage, claims-made form ¶: A policy that responds when a claim is first made and reported during the policy period. The care must occur on or after the retroactive date.
claims-paid policy Also called: claims-paid form, assessable claims-paid ¶: A policy that responds when the insurer pays a claim, rather than when the incident occurs or the claim is reported. The policy must be active when payment occurs.
convertible policy Also called: convertible claims-made policy ¶: A claims-made policy that gives the insured an option to change to another policy form. The policy states the conversion conditions.
declarations page Also called: dec page, policy declarations ¶: The policy section that identifies the insured, policy period, limits, premium, and other key facts.
effective date Also called: inception date, coverage start date ¶: The date when a policy begins to cover the work described in the policy.
endorsement Also called: policy endorsement, rider ¶: A document that changes a policy. An endorsement can add an insured, location, service, limit, or reporting period.
evidence of coverage Also called: proof of coverage, written confirmation of coverage ¶: A document from the insurer that confirms stated coverage. It identifies the coverage and any conditions shown on the document.
expiration date Also called: policy end date, termination date ¶: The date when the policy period ends unless the insurer renews it.
modified claims-made policy Also called: hybrid policy form ¶: A claims-made policy with a feature normally provided by a separate endorsement, such as prepaid tail coverage. The policy defines the feature.
occurrence policy Also called: occurrence coverage, occurrence form ¶: A policy that responds to a covered incident that occurs during the policy period. The claim can be reported after that period ends.
policy period Also called: coverage period, policy term ¶: The time from a policy's effective date to its expiration date. A claims-made policy uses this period to test when a claim was reported.
renewal Also called: policy renewal ¶: The continuation of a policy for another term. The insurer can request updated practice information and change the renewal terms or premium.

Tail, nose, and dates

continuous coverage Also called: unbroken coverage, continuity of coverage ¶: Claims-made coverage kept without an interruption. A replacement policy can preserve continuity by carrying forward the same retroactive date.
coverage gap Also called: gap in coverage, uncovered period ¶: Past care or current work that falls outside every applicable policy. A missing tail or prior-acts date can create this gap.
death, disability, and retirement tail Also called: DD&R tail, DDR provision ¶: A policy provision that offers tail coverage without an added premium after a qualifying death, disability, or retirement. The policy states the required age, tenure, and other conditions.
extended reporting period Also called: reporting window, ERP period ¶: The time allowed to report claims under a tail endorsement. The endorsement states when this period begins and ends.
free tail Also called: no-cost tail, carrier-provided tail ¶: Tail coverage issued without an added premium when the insured meets stated policy conditions. The insurer defines those conditions.
lapse in coverage Also called: policy lapse, cancellation for nonpayment ¶: An end to coverage when a policy expires or is canceled without replacement coverage. A lapse can break prior-acts continuity.
limited tail Also called: fixed-term tail, one-year tail, five-year tail ¶: A tail endorsement with a fixed reporting period. The insured cannot report a claim under it after that period ends.
nose coverage Also called: prior acts coverage, retroactive coverage ¶: Coverage under a new claims-made policy for care provided before that policy began. The new policy carries forward an earlier retroactive date.
retirement tail eligibility Also called: retirement tail conditions ¶: The policy conditions for a retirement tail without an added premium. These conditions can include age, retirement status, and years of continuous coverage.
retroactive date Also called: prior-acts date, retro date ¶: The earliest care date that a claims-made policy can cover. The policy does not cover care provided before this date.
tail coverage Also called: extended reporting endorsement, ERE, ERP, tail ¶: An endorsement that lets an insured report claims after a claims-made policy ends. It applies to covered care provided before the policy ended, not to new care.
tail election deadline Also called: tail purchase window ¶: The last date when an insured can elect or buy a tail endorsement. The expiring policy states this deadline.
tail premium Also called: tail cost, tail factor ¶: The price of a tail endorsement. An insurer can state this price as a percentage or multiple of the expiring annual premium.

Limits

aggregate limit Also called: annual aggregate, policy aggregate ¶: The most a policy can pay for all claims during one policy period. It is the second number in a limit pair such as $1 million/$3 million.
deductible Also called: policy deductible ¶: The amount an insured must pay toward a covered claim. The insurer pays the remaining covered amount up to the applicable limit.
defense inside the limits Also called: eroding limits, wasting policy, defense within limits ¶: A policy term that subtracts defense costs from the liability limit. Each defense payment leaves less money for a settlement or judgment.
defense outside the limits Also called: defense in addition to limits ¶: A policy term that pays defense costs in addition to the liability limit. Defense payments do not reduce the amount available for a settlement or judgment.
excess coverage Also called: excess policy, excess limits ¶: A policy that adds liability limits above a listed underlying policy. It begins to pay after the underlying limit and other stated conditions are met.
first-dollar coverage Also called: no-deductible coverage ¶: Coverage with no deductible or self-insured retention. The insurer pays covered amounts from the first dollar.
limits of liability Also called: policy limits, coverage limits ¶: The maximum amounts that a policy can pay. These can include a per-claim limit and an aggregate limit.
per-claim limit Also called: per-occurrence limit, each-claim limit ¶: The most a policy can pay for one claim. It is the first number in a limit pair such as $1 million/$3 million.
self-insured retention Also called: SIR ¶: The amount an insured must pay before an insurer begins to pay a claim. The policy states who controls the defense and how defense costs apply.
separate limits Also called: individual limits, own limits ¶: Per-claim and aggregate limits assigned to one insured. Another insured's claim does not reduce these limits.
shared limits Also called: shared limit policy, common limits ¶: Limits used by more than one insured person or entity. A payment for one insured reduces the amount available to the others.
sublimit Also called: sub-limit, specific limit ¶: A lower limit for one type of claim, service, or expense within a policy. The sublimit applies instead of the main limit for that item.

Underwriting

application Also called: insurance application, underwriting application ¶: A signed record of the facts that an insurer uses to evaluate a risk. It can include specialty, procedures, hours, locations, and claim history.
claims history Also called: loss history, claims experience ¶: A record of past claims, lawsuits, and reported incidents. Insurers review this record during underwriting.
consent to settle Also called: consent provision, consent clause ¶: A policy provision that requires the insured's consent before the insurer settles a claim. The policy states the form of consent and any limits on that right.
credentialing Also called: hospital credentialing, payer credentialing ¶: A process that verifies a clinician's license, training, experience, and other qualifications. A hospital, facility, or payer can require proof of malpractice coverage.
exclusion Also called: policy exclusion, excluded activity ¶: A policy term that removes a stated activity, service, person, property, or cause of loss from coverage.
financial strength rating Also called: A.M. Best rating, carrier rating ¶: An independent rating agency's opinion of an insurer's ability to meet its financial obligations. The agency states the rating scale and review date.
hammer clause Also called: settlement cap provision ¶: A provision that limits the insurer's payment after an insured rejects an available settlement. The policy states the cap and any amount the insured must pay.
loss run Also called: loss run report, claims report ¶: A report from an insurer that lists an insured's claims. It can show claim dates, status, payments, and estimated future payments.
material misrepresentation Also called: misstatement on application, nondisclosure ¶: A false or omitted application fact that is important to an insurer's decision to offer coverage or set terms.
mature premium Also called: mature claims-made rate, step rating ¶: The full annual premium for a claims-made policy after its introductory annual steps end.
moonlighting Also called: secondary practice, outside employment coverage ¶: Paid clinical work outside a physician's primary job. It can include extra shifts, locum tenens work, or a separate practice.
new-to-practice credit Also called: new physician discount, first-year credit ¶: A temporary premium reduction for a physician in the first years of practice. The insurer sets the eligibility period and reduction schedule.
part-time credit Also called: part-time discount, reduced-hours rate ¶: A premium reduction for work below an insurer's stated hours or activity threshold. The insurer sets the threshold and reduction.
premium Also called: annual premium, policy premium ¶: The amount charged for coverage during a policy period. The insurer calculates it from its rates, the exposure, selected limits, and applicable adjustments.
rating territory Also called: territory, geographic rating ¶: A geographic unit that an insurer uses to calculate a base rate. The insurer's rating plan assigns each location to a territory.
risk class Also called: specialty class, rating class, ISO class ¶: The category an insurer assigns to a specialty, procedure mix, or other exposure. The insurer uses the class to calculate base premium.
risk management program Also called: risk management credit, loss prevention program ¶: Training, review, and other work intended to reduce how often claims occur or how much they cost. An insurer can connect a premium credit to a stated program.
schedule rating Also called: schedule credit, debit and credit rating ¶: A premium adjustment within an insurer's filed range. The rating plan lists the practice factors that can produce a credit or debit.
underwriting Also called: risk evaluation, underwriting review ¶: The insurer's review of a person or practice before it offers or renews coverage. The review determines available terms and premium.

Entities and structures

corporate practice of medicine Also called: CPOM, physician ownership requirement ¶: A state doctrine that limits who can own or control a medical practice. In California, physicians must own at least 51 percent of a professional medical corporation.
employed physician Also called: W-2 physician, employer-provided coverage ¶: A physician who works as an employee. The employment agreement and malpractice policy state whether the employer provides coverage and tail.
entity coverage Also called: corporate coverage, practice entity coverage ¶: Malpractice coverage for the legal entity that operates a practice. The policy states whether the entity has shared or separate limits.
group policy Also called: group malpractice program, group coverage ¶: A malpractice policy or program that covers multiple clinicians and may also cover the practice entity. It can use shared or separate limits.
independent contractor Also called: 1099 physician, contracted clinician ¶: A clinician who provides services under a contract but is not an employee. The contract and policy assign malpractice coverage duties.
locum tenens coverage Also called: locums coverage, substitute physician coverage ¶: Malpractice coverage for a physician who temporarily replaces another physician. The physician's policy, host policy, or staffing program can provide it.
professional corporation Also called: PC, medical corporation, professional entity ¶: A corporation authorized to provide licensed professional services. State law controls who may own and manage it.
slot coverage Also called: position coverage, FTE slot policy ¶: A group policy that covers a position or full-time-equivalent slot instead of one named clinician. Different clinicians can occupy the slot at different times.
solo practice Also called: solo practitioner, independent practice ¶: A medical practice owned by one physician. The practice can operate in the physician's name or through a permitted entity.
vicarious liability Also called: imputed liability, respondeat superior ¶: Legal responsibility for another person's act based on a relationship between them. An employer can have vicarious liability for an employee's work.

Claims

claim Also called: malpractice claim, demand ¶: A demand that alleges a wrongful act and asks for money, services, or another remedy. The policy defines which demands count as claims.
defense counsel Also called: defense attorney, panel counsel ¶: The attorney who represents an insured in a claim. The policy states who selects and pays the attorney.
deposition Also called: sworn testimony, discovery deposition ¶: Sworn testimony taken before trial as part of discovery. A court reporter records the questions and answers.
duty to defend Also called: defense obligation ¶: An insurer's contractual duty to provide a legal defense for a claim that meets the policy's defense standard.
expert witness Also called: medical expert, standard-of-care expert ¶: A person qualified by knowledge, training, or experience to give an opinion in a legal case. A medical expert can address the standard of care.
frequency and severity Also called: claim frequency, claim severity ¶: Two measures of claim experience. Frequency is how often claims occur. Severity is how much claims cost.
incident reporting Also called: incident report, early reporting ¶: Notice to an insurer about an adverse event before a claim arrives. The policy states whether this notice preserves coverage for a later claim.
indemnity payment Also called: indemnity, loss payment ¶: Money paid to a claimant to resolve a covered claim. It does not include the cost of defending the claim.
informed consent Also called: consent to treatment, consent documentation ¶: A process in which a clinician explains material risks, benefits, and alternatives before a patient agrees to treatment. The medical record documents that process.
National Practitioner Data Bank Also called: NPDB, data bank ¶: A federal information system that receives reports about medical malpractice payments and specified adverse actions involving health care practitioners.
notice of intent to sue Also called: 90-day notice, CCP 364 notice ¶: A written notice that California law requires before a plaintiff files a professional-negligence action against a health care provider. The plaintiff must give it at least 90 days before filing.
potential claim Also called: awareness of claim, circumstance reporting ¶: A known event or circumstance that could lead to a claim. The policy states when the insured must report it.
reservation of rights Also called: ROR letter ¶: A notice that an insurer will defend a claim while it reviews or disputes specified coverage issues. The notice identifies the rights that the insurer preserves.
settlement Also called: settled claim, resolution ¶: An agreement that resolves a claim without a trial decision. It can include payment, release, confidentiality, and other terms.
statute of limitations Also called: filing deadline, CCP 340.5 ¶: The legal deadline for filing a lawsuit. California Code of Civil Procedure section 340.5 uses the earlier of a three-year injury deadline and a one-year discovery deadline. The statute also states exceptions.
structured settlement Also called: periodic payment settlement ¶: A settlement that pays some or all money through scheduled payments instead of one lump sum.
verdict Also called: jury verdict, jury award ¶: A jury's decision on the questions submitted at trial. The court can then enter a judgment based on the verdict and other rulings.

California

AB 35 Also called: MICRA modernization, MICRA reform 2022 ¶: A 2022 California law that changed several MICRA rules. It began annual increases to the noneconomic damage limits on January 1, 2023.
AB 890 Also called: NP full practice authority, 103 NP, 104 NP ¶: A 2020 California law that created two nurse practitioner certificates for practice without standardized procedures. Section 103 applies in specified group settings. Section 104 applies outside those settings after additional qualifications.
admitted carrier Also called: licensed insurer, admitted market ¶: An insurer licensed by the California Department of Insurance to issue policies in California.
attorney fee limits Also called: MICRA fee schedule, contingency fee limits ¶: California Business and Professions Code section 6146 limits contingency fees in professional-negligence cases. The limit is 25 percent before a civil complaint or arbitration demand and 33 percent after that point. After a trial or arbitration, the attorney can ask the court or arbitrator to approve a higher fee.
California Department of Insurance Also called: CDI, state insurance regulator ¶: The state agency that licenses insurers and insurance professionals in California. It also reviews rate filings and handles consumer complaints.
California Insurance Guarantee Association Also called: CIGA, guarantee association ¶: A statutory association that pays covered claims of insolvent member insurers. California law sets claim eligibility and payment limits.
captive insurer Also called: captive insurance company, single-parent captive ¶: An insurance company owned by the organization or group whose risks it insures. The captive's domicile licenses and regulates it.
economic damages Also called: special damages, monetary losses ¶: Damages for measurable financial loss, such as medical costs and lost earnings. MICRA does not set a maximum amount for these damages.
Medical Board of California Also called: MBC, state medical board ¶: The state agency that licenses and disciplines California physicians and surgeons. It also publishes guidance about medical practice and ownership.
MICRA Also called: Medical Injury Compensation Reform Act, MICRA of 1975 ¶: A group of California laws that govern professional-negligence claims against health care providers. MICRA addresses noneconomic damages, attorney fees, and periodic payments.
mutual insurance company Also called: mutual insurer, member-owned carrier ¶: An insurance company owned by its policyholders. Eligible policyholders can receive the ownership rights stated in the company's governing documents.
non-admitted carrier Also called: surplus lines carrier, excess and surplus lines ¶: An insurer that is not licensed in California but is eligible to issue specified coverage through a surplus-lines broker. Its policies do not receive CIGA protection.
noneconomic damages cap Also called: pain and suffering cap, MICRA cap ¶: California's limit on damages for pain, suffering, and other nonmonetary harm in specified professional-negligence cases. AB 35 sets separate amounts for injury and wrongful-death cases.
periodic payments Also called: periodic payment of future damages ¶: A method of paying future damages on a schedule instead of one lump sum. California law permits this method for qualifying professional-negligence judgments.
physician cooperative Also called: interindemnity arrangement, cooperative of physicians ¶: A California arrangement in which member physicians share specified claim costs through a trust and an interindemnity agreement. It is not a conventional insurance policy.
physician-owned carrier Also called: physician-founded insurer, doctor-owned company ¶: A liability insurance company owned or controlled by physicians. Its legal form can be a stock company, mutual company, reciprocal exchange, or another permitted form.
rate filing Also called: prior approval, Proposition 103 rate review ¶: An insurer's submission of rates and rating rules to the California Department of Insurance. Proposition 103 requires approval before an admitted insurer uses applicable property and casualty rates.
reciprocal exchange Also called: interinsurance exchange, reciprocal insurer ¶: An insurer owned by subscribers who exchange insurance contracts with each other. An attorney-in-fact manages the exchange for the subscribers.
risk retention group Also called: RRG ¶: A member-owned liability insurer formed under state law and the federal Liability Risk Retention Act. It can register to insure eligible members in other states.
surplus lines Also called: excess and surplus, E&S market ¶: A regulated channel for placing coverage with an eligible nonadmitted insurer. A California-licensed surplus-lines broker completes the placement.

Other liability coverage and asset protection

asset protection Also called: personal asset protection, liability planning ¶: Liability planning that uses insurance, entity ownership, and legal exemptions to reduce the assets exposed to a claim or judgment.
billing errors and omissions coverage Also called: billing E&O, audit defense coverage ¶: A policy for claims that allege errors in medical billing or coding. It can also include costs from a payer or government audit.
business owners policy Also called: BOP, package policy ¶: A package that combines commercial property and general liability coverage for a business. Professional liability is separate unless the policy adds it.
commercial umbrella Also called: business umbrella, commercial excess liability ¶: A business policy that adds liability limits above listed commercial policies. It adds malpractice limits only when the umbrella includes that coverage.
cyber liability insurance Also called: cyber coverage, data breach insurance ¶: A policy for response costs and liability from data breaches, ransomware, privacy events, and system failures.
directors and officers coverage Also called: D&O, management liability ¶: A policy for claims that allege wrongful acts by directors or officers in their management roles. It does not cover medical care.
employment practices liability insurance Also called: EPLI, employment claims coverage ¶: A policy for employer claims such as wrongful termination, discrimination, harassment, and retaliation.
general liability insurance Also called: GL, premises liability, slip-and-fall coverage ¶: Business coverage for bodily injury, property damage, and personal or advertising injury from premises or nonclinical operations. Professional services require separate coverage or an endorsement.
homestead exemption Also called: California homestead, primary residence protection ¶: A California exemption for a statutory amount of equity in a principal dwelling when a judgment creditor seeks a forced sale. The amount changes over time.
med spa liability coverage Also called: medical spa insurance, aesthetics practice coverage ¶: A combination of malpractice, general liability, property, and other policies for a medical spa. Together, the policies address clinicians, procedures, premises, drugs, and devices.
personal umbrella policy Also called: umbrella insurance, personal excess liability ¶: A personal policy that adds liability limits above listed home and auto policies. It does not add medical malpractice limits.
professional vs general liability Also called: malpractice vs general liability ¶: Professional liability addresses allegations about medical care. General liability addresses premises and nonclinical business operations.
regulatory defense coverage Also called: license defense, administrative defense, disciplinary defense ¶: A policy benefit for legal costs from licensing-board investigations and other administrative proceedings.
retirement plan creditor protection Also called: ERISA protection, retirement asset exemption ¶: Creditor protection for specified retirement accounts under federal or state law. The protected amount and exceptions depend on the account type.
telemedicine liability coverage Also called: telehealth coverage, virtual care coverage ¶: Malpractice coverage for medical care delivered remotely. The policy identifies the covered clinicians, services, locations, and patient jurisdictions.
workers' compensation Also called: workers comp, work comp ¶: Coverage that pays statutory benefits for an employee's work-related injury or illness. California employers must carry it unless a statutory exception applies.