Med-Mal 101 : Types of Malpractice Insurance Policies
Claims-made vs Claims-paid vs Tail Coverage vs Nose Coverage.
Today, almost all professional liability carriers offer claims-made or occurrence policies. A less common type of coverage is claims-paid.
Claims made policy
A claims-made policy is a form of insurance in which coverage is limited to liability for claims arising from incidents or events that occur and are reported to the insurance company while the policy is in force. Thus, once reported to the insurer, the insurer remains liable for the ultimate resolution of the claim or suit.
Claims paid policy
A claims-paid coverage policy’s premiums are based only on those claims settled during the previous year or those projected to be settled in the coming year. Many claims-paid policies are assessable for several years, or even indefinitely, after a physician terminates the policy.
An occurrence policy
An occurrence policy covers the insured for any incident that occurs (or that did occur) while the policy is (or was) in force, regardless of when the incident is reported or when it becomes a claim.
There are also two types of endorsements intended to provide coverage either before or after your claims-made policy or policies are in effect.
Tail coverage (extended reporting) protects the physician against all claims that arise from professional services performed while the claims-made policy was in effect, but which were reported after the termination of the policy.
Some insurers offer this feature free of charge for retiring doctors who meet certain requirements.
Nose coverage (retroactive or prior acts) provides insurance for claims arising from incidents that occurred while a previous claims-made policy or policies were in effect, but that were not reported until that policy (or the last in a succession of policies) was terminated. With retroactive coverage, the new policy covers such claims and purchase of tail coverage from the previous carrier is not necessary.
The guidelines suggested here are not rules, do not constitute legal advice, and do not ensure a successful outcome. The ultimate decision regarding the appropriateness of any treatment must be made by each healthcare provider in light of all circumstances prevailing in the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.