Help applicants brush up on medical malpractice insurance musts

Most healthcare facilities and health plans require medical malpractice insurance coverage. There are two types of medical professional liability insurance policies available:

  • Claims-made
  • Occurrence

Claims-made policies cover claims made against the policyholder only during the time when the policy is in effect. That means that both the alleged malpractice and the resulting claim must happen during the time when the policy was in force. When the policy ends, the coverage stops. If a patient makes a claim after the coverage period ends, the claim will not be covered even if the incident happened while the policy was in force. This means that practitioners will have to purchase an additional policy from the insurer covering them for an extended reporting period, also known as “tail” coverage. Another option is to purchase prior-acts or “nose” coverage from the new insurer, which will cover acts committed when covered by the claims-made policy of the previous insurance carrier.

Occurrence policies cover all incidents that occur while the policy is in force, regardless of when the incident is reported or when a claim is filed. Due to the statute of limitations in some states allowing lawsuits to be filed years after the incident, it makes sense to have an occurrence type of policy.

Source: The Clinician's Quick Guide to Credentialing and Privileging