Medical Malpractice (aka Professional Liability) insurance is one of the most vital and expensive insurance coverages physicians carry and is required by law in most states. In the current healthcare environment, it is crucial for providers to educate themselves before choosing a Medical Malpractice insurance carrier. It is a provider’s worst nightmare to purchase expensive insurance coverage year after year only to find out when a claim arises they don’t have decision making power over settlement, minimal coverage or perhaps no coverage at all. In the unfortunate event of a claim, it is a provider’s assets and reputation on the line. Knowing the right questions to ask can alleviate the stress associated with purchasing Medical Malpractice coverage.
Here are 5 questions you need to ask a Medical Malpractice Insurance carrier before purchasing coverage:
- Is the company rated “A” or higher by A.M. Best?
Liability claims take years to develop and you want to be with a carrier who is going to be in business in the event of a claim. You want a financially strong carrier, because if a carrier goes out of business, you may be left without coverage.
- Does the company have an ‘unconditional consent to settle’ provision included in their policies?
A Consent to settle provision can be defined as a provision that requires the physicians consent before the carrier can settle the claim on the physicians behalf. It gives the policyholder the right to refuse to settle a claim. It is important for the insured to have the final say in whether or not they want to fight or settle a claim because it is your reputation on the line.
- Does the company offer risk management services to help mitigate claims?
It is critical for physicians to utilize carrier risk management services to reduce risk and avoid lawsuits. Your carrier should have resources to assist you with onsite seminars, risk management courses, consultations and other tools and general support to minimize your chance of being named in a claim.
- Does the company utilize local law firms that specialize in medical malpractice insurance?
It is importance for your carrier to have local expert counsel who specialize in medical malpractice insurance and have the state specific knowledge and experience to defend.
- What are the free tail provisions for claims-made policies?
Under a claims-made policy, in the event you terminate your policy and to ensure all claims that occur after the policy is cancelled are covered by the insurance carrier, you must purchase tail coverage. Many carriers offer free tail provisions in the event of death, disability and retirement. Each state has different statutes of limitations for discovery of claims and you want to be sure if your policy cancels you are covered in the event of new discoveries. This provision becomes especially important when physicians are closer to retirement.
ACOs can implement a professional liability insurance program for their providers and potentially save each provider 20% to 40% in premiums. Not only does this increase the viability of the physician’s practice but it offers an additional benefit to joining your ACO.