Independent voices on malpractice insurance
A selection of excerpts from indepdent voices on medical malpractice insurance.
The White Coat Investor
Insurance Is the First Line of Defense
Even though the risk of a malpractice judgment exceeding your policy limits is extremely low, most physicians will be sued during their career. Many frivolous suits are dismissed, but a significant percentage is simply settled. Malpractice insurance is expensive for a reason—because it gets used to defend you and to pay settlements.
Be sure to buy a policy similar to what other physicians in your specialty and state carry. “Going bare” (going without malpractice insurance), where allowed, can be a risky gamble and should only be done as a last resort in an area with ridiculously expensive malpractice premiums. If you do not expect to stay in the same job for a long period of time, then consider getting an “occurrence” policy rather than a “claims-made” policy, which will require a “tail” to be purchased. Occurrence policies will cover liability claims resulting from an act that occurred while you were covered under the policy. Claims-made policies only cover claims brought during the coverage period, and so if a claim is brought after that period, there will be no coverage unless you purchase a tail. A tail may be two to three times the cost of the annual premium for a claims-made policy, so unless an occurrence policy is far more expensive than a comparable claims-made policy or simply unavailable, occurrence is usually the way to go. However, keep in mind that many claims-made policies provide a free tail upon retirement if that occurs after age fifty”
Excerpt From: Dahle, James M. “The White Coat Investor: A Doctor’s Guide To Personal Finance And Investing.”