Insurance FAQs

What should I be aware of when offered lower cost malpractice insurance?

Medical professionals and facility managers should exercise caution when offered low-cost medical malpractice insurance. Sometimes, a low premium can indicate important coverages are missing or limited.

Here is a list of potential issues and things to be aware of:

1. Coverage Limits: Lower-cost policies may come with lower coverage limits, potentially leaving you under-insured in the event of a large claim.
2. Exclusions: Ensure that the policy doesn’t exclude vital coverages. Common exclusions might involve certain procedures, treatments, or patient populations.
3. Defense Costs: Determine if defense costs are inside or outside the limits of liability. If they are inside the limits, it means that legal fees and other defense expenses will reduce the available policy limits for any settlements or judgments.
4. Tail Coverage: Sometimes called “extended reporting” provisions, this covers incidents that happened during the policy period but are reported after the policy ends. Ensure it’s available, if you’re considering a claims-made policy.
5. Consent to Settle: Check if the policy allows the insurer to settle a claim without your consent. Some professionals prefer having a say in whether or not a claim is settled.
6. Deductible: This is the amount you have to pay before the insurance begins to cover a claim. A lower-cost policy might have a higher excess, meaning you pay more out-of-pocket in the event of a claim.
7. Geographic Limitations: Make sure the policy covers you in all the locations and settings in which you practice.
8. Telemedicine: If you provide remote consultations or services, ensure telemedicine is covered, as not all policies automatically include this.
9. Affiliated Providers: If you work with or supervise other medical professionals, ensure they are covered or be aware of the limits to their coverage.
10. Licensing Issues: Some low-cost policies might only provide coverage if you’re sued, but won’t cover expenses related to licensing board investigations or actions.
11. Cancellation: Check the policy’s cancellation clauses. Some low-cost policies might have strict cancellation terms or might not return a prorated premium if you cancel mid-term.
12. Financial Strength of the Insurer: A lower premium might be a sign that the insurer isn’t financially robust. Check ratings from agencies like A.M. Best to ensure your insurer has the financial strength to pay out claims.
13. Claim Services: Investigate the insurer’s track record in terms of handling and settling claims. A cheaper policy might mean less support during the claims process.
14. Retroactive Date: For claims-made policies, be aware of the retroactive date. If you change insurers, a new retroactive date might mean you aren’t covered for previous incidents.
15. Endorsements & Riders: A basic, lower cost policy might need additional endorsements or riders to provide the comprehensive coverage you need.
16. Group Policy vs. Individual Policy: Sometimes a group policy can cost less, but make sure you understand the shared limits and potential downsides of being grouped with others.

When considering medical malpractice insurance, it’s essential to consult with a knowledgeable broker or agenty, to ensure that you’re getting the coverage that suits your needs and adequately protects you from potential liabilities.