NEW DOCTOR FREQUENTLY ASKED QUESTIONS
Q. What is Medical Malpractice Insurance and why do I need it?
Medical malpractice insurance, called medical professional liability insurance, is a must-have for every health care professional. Even the most skilled physician can make a mistake and must protect themselves against that possible outcome. Defending yourself in a malpractice lawsuit is an expensive cost. Since the cost of defense is high, in addition to the devastation of having a loss, having a medical professional liability policy is crucial to every physician and a physician practice.
Q. What is covered by my medical professional liability policy?
The EmPRO policy covers you for professional services you render or fail to render, such as: medical, or surgical treatments, diagnosis, opinion or advice, reading of charts, treatment of patients basically any claim of medical negligence.
Q. What are limits of liability?
The EmPRO policy has two limits of liability:
- Per Claim Limit: The amount of indemnity coverage available for each claim that is reported. Typically, a policyholder purchases a per claim limit of $1,300,000.
- Annual Aggregate Limit: The amount of indemnity coverage available for all claims reported during the policy term.
- Typically, a policyholder purchases an annual aggregate of $3,900,000.
Other limit of liability options are available.
Q. What are Claims-Made and Occurrence policies?
A CLAIMS-MADE policy generally covers claims or incidents which are first reported while your policy is in effect.
An OCCURRENCE policy covers claims or incidents occurring during your policy period irrespective of when the claim is reported.
Q. Why is the Claims-Made policy premium less than an Occurrence policy?
Because the insurer has a reduced risk of loss during the first year of a new claims-made policy. This is why the first year premium of a claims-made is lower. Each year as the claims-made policy renews, the insurer’s exposure increases. For the first eight years of a claims-made policy, the premium increases incrementally to reflect the increased exposure to the insurer. This process is known as the “claims-made step factor.” By the eighth year, the step factor reaches maturity because all possible exposure has been accounted for. On the other hand, an insurer’s exposure under an occurrence policy includes the risk of claims reported after the termination of coverage, provided the claim occurred during the policy period. As a result, the higher premium in the early years reflects the increased exposure to the insurer.
Q. What is Tail Coverage and Nose Coverage?
Tail Coverage extends the reporting period under a claims-made policy after the policy expiration date.
Nose Coverage (prior acts coverage) generally sets a date prior to the claims-made policy effective date after which all claims reported during the policy period will be covered.
Q. Do I need to get a medical professional liability policy while still in residency/fellowship?
Generally, for medical care delivered by a resident/fellow as a function of his/her work in a training program, the physician in training will be covered under the program or hospital policy. You should consult the training program in which you are enrolled.
Q. Is the cost of professional liability insurance different depending on where you work?
Yes. The cost of insurance (i.e. the premium) is based on factors such as specialty and location of practice. Even within a state such as New York, the cost of insurance will depend on where the physician or other provider is practicing. This is because certain geographies are associated with higher frequencies of lawsuits as well as higher payouts to plaintiffs. A professional liability underwriter can provide you with a quote based on different locations or “territories” of practice.
Q. If I get sued, will my professional liability insurance increase or will the insurance company “drop” (i.e. non-renew) my coverage?
New York law requires insurers to adopt a rating plan for imposing rate surcharges based upon an individual’s past history of claims or disciplinary actions and other criteria. The plan is intended to produce a more accurate individual premium by using past claim history to predict the likelihood of future claims. There are multiple variables that are taken into account when evaluating a surcharge or non-renewal.
If you have additional questions not listed here, please feel free to contact us directly.
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