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General Insurance FAQ's

What are the advantages of dealing with an insurance broker?

Commercial insurance brokers like Westwood play a crucial role in supporting you even after a policy has been bound. Our ongoing assistance ensures that you are adequately protected and can navigate any issues or changes that arise during the policy period. Here’s how we help you post-binding:

  1. Policy Management and Administration: We assist with documentation and record keeping, ensure that all your policy documents are properly filed and accessible and manage renewals and amendments.
  2. Assistance with Filing Claims: We act as your advocate, assisting you with filing claims, ensuring that all necessary documentation is provided and that the process is initiated promptly.
  3. Risk Management and Loss Prevention: We assess your risk exposures and advise you on strategies to mitigate these risks.
  4. Advice on Regulatory Changes: We keep you informed about changes in insurance regulations and industry standards that could impact your coverage.
  5. Client Education: We strive to educate you on the intricacies of your insurance policies, helping you understand coverage limits, exclusions, and obligations.
  6. Premium Optimization: We work to optimize insurance costs for you by negotiating competitive premiums and exploring alternative coverage options that offer better value.
  7. Emergency Response: In the event of a crisis, such as a natural disaster or significant business disruption, we assist you in mobilizing resources, filing claims quickly, and accessing emergency funding.
Can I deal directly with the insurance company?

You can buy insurance directly from some insurance companies, but here is why you probably shouldn’t:

  1. Your options are limited as many insurers only deal with appointed brokers and will not sell retail. Finding the best policy becomes difficult with so few options.
  2. Westwood Insurance deal with a large number of insurance companies (at the moment we are appointed to represent almost 100 different companies. Although many of them offer similar products, like Professional and General Liability, they all have particular “appetites.” Some prefer doctors with certain specializations, some prefer certain US geographic locations. Some prefer small facilities, some prefer larger facilities. They all tend to have a niche they are comfortable with.
  3. If you buy insurance from a company that doesn’t really favor your profession or type of facility, you will pay higher premium than you would from one who prefers your specialization or facility type.
  4. The appetites of insurance companies change. They could move away from insuring your specialization or geographic location and change higher premiums to continue your insurance. We monitor the changing appetites of insurance companies and advise you of changes, so you can continue to enjoy reasonable prices.
  5. You don’t save money by going direct. Insurance companies will charge you the same amount as you will pay when Westwood or our agents manage your insurance. You can read our compensation disclosure here.
I've been offered really cheap insurance. Is there anything I should be aware of?

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.

What is the difference between Claims-made and Occurrence policies?

In medical malpractice insurance, there are two main types of policies: claims-made and occurrence.

  • A claims-made policy provides coverage for claims only if the policy is active both when the incident occurred and when the claim is filed. This means that if a doctor or healthcare provider switches insurers or their policy expires, any claims made afterward for incidents that happened during the coverage period will not be covered unless additional protection, is purchased known as tail coverage insurance.
  • An occurrence policy on the other hand covers any incident that happened during the period the policy was active, regardless of when the claim is made. This means that even if the policy has expired, as long as the event occurred while the policy was in force, the claim will be covered. Because of this extended protection, occurrence policies are often seen as more comprehensive but are more expensive.

Tail coverage is an option available for medical professionals with claims-made policies who are retiring, or changing insurer. It allows a provider to extend coverage for claims filed after the policy has ended for incidents that occurred while the policy was in place. This additional protection ensures that healthcare providers are not left vulnerable to claims that surface later, providing peace of mind as they transition to new policies or retire from practice.

What is the likelihood of being sued for medical malpractice?

Medical malpractice lawsuits are a significant concern for physicians in the United States, with the likelihood of facing such claims varying by specialty and career stage.

Overall Risk

  • A 2011 study published in the New England Journal of Medicine reported that by the age of 65, 75% of physicians in low-risk specialties and 99% in high-risk specialties had faced a malpractice claim. Wikipedia

Specialty-Specific Risk:

  • A 2023 survey indicated that 90% of general surgeons had been named as defendants in malpractice lawsuits, making them the most frequently sued specialists. Statista

Annual Incidence

  • Approximately 20,000 medical malpractice lawsuitsare filed annually in the U.S. Miller Zois

These statistics underscore the substantial risk of malpractice claims that physicians face, particularly in high-risk specialties. Understanding these risks is crucial for medical professionals when considering malpractice insurance and implementing risk management strategies.

Which US states require medical malpractice insurance?

The legality of practicing medicine without malpractice insurance, known as “going bare,” varies across the United States. While no federal mandate requires physicians to carry malpractice insurance, state laws differ significantly.

States Requiring Malpractice Insurance:

Several states mandate that physicians maintain active malpractice insurance policies:

  • Colorado: Physicians must carry malpractice insurance with at least a $1 million per-occurrence limit and a $3 million aggregate limit.
  • Connecticut, Kansas, Massachusetts, New Jersey, Rhode Island, Wisconsin: These states also require physicians to have malpractice insurance, though specific coverage limits may vary.

States with Conditional Requirements:

Some states do not universally require malpractice insurance but impose conditions under certain circumstances:

  • Indiana, Louisiana, Nebraska, New Mexico, New York, Pennsylvania, Wyoming: In these states, physicians must carry a minimum level of coverage to participate in state programs that either limit the amount of damages from a malpractice claim or provide supplemental malpractice coverage.
  • California: >Physicians are required to carry malpractice insurance only if they perform outpatient surgery.
  • Florida: Physicians can be exempt from carrying malpractice insurance if they meet specific stipulations, such as posting a bond, maintaining an escrow account, or obtaining an irrevocable letter of credit. They must also notify patients of their lack of insurance.

States Without Malpractice Insurance Requirements:

Approximately 32 states do not have laws mandating malpractice insurance for physicians. However, hospitals, employers, or insurance plans within these states may still require physicians to carry such insurance as a condition of employment or practice privileges.

Requirements on Extended Reporting Period (ERP) or “Tail” Coverage:

Tail coverage is crucial for claims-made malpractice insurance policies, as it covers claims filedafter a policy has ended for incidents that occurred during the policy period. While some states mandate malpractice insurance, specific requirements for tail coverage are less common and often depend on employer policies or hospital bylaws. For instance,many hospitals require physicians to have tail coverage to maintain privileges, andsome insurers may also mandate it.

Tail Coverage FAQ's

What is ERP (Tail) Coverage?

Extended Reporting Period (ERP) or tail insurance is an essential insurance add-on for professionals, particularly in the medical and legal fields. It provides extended protection for claims made after a claims-made professional liability policy has ended. This means that if a doctor retires, changes jobs, or switches insurance companies, they are still protected against claims from incidents that occurred while the original policy was active.

If you are covered by an occurrence type policy, you do not need tail coverage. Your policy will cover you for any claims made against events that occurred during the insurance period.

why do I need tail malpractice insurance?

Most medical malpractice claims are filed more than 12 months after the medical incident occurred. When you cancel or don’t renew a claims-made policy you could be at risk. You need tail insurance coverage to protect against future lawsuits stemming from incidents that happened before the policy expired. This is known as your prior acts period.

Visit the ERP?Tail Coverage page for more information

Can I delay getting my ERP/Tail coverage after leaving employment?

Unfortunately, few insurance providers will accept your application, once you have chosen to remain uninsured for any period. You are considered a ‘high riosk’ prospect and even if you were accepted, you would probably find that your premiums would be much higher.

For this reason, you should carefully weigh your options before making a decision to risk remaining uninsured.

Will my next employer cover the ERP/Tail insurance for my previous work?

Commonly referred to as ‘Prior Acts Coverage’, it is generally uncommon for any employer to take on the obligations of a previous employer.

While you could request this, you should take into account any consideration that may be required of you by your employer in exchange.

Would I incur legal costs without ERP/Tail coverage?

Choosing to operate without malpractice insurance creates a substantial financial burden in the event of a claim:

  • Defending Against Litigation: Without insurance, you bear the full cost of legal representation to defend yourself against claims. Defense costs alone can range from tens of thousands to hundreds of thousands of dollars, even if the case is frivolous or ultimately dismissed.
  • Asset Disclosure Costs: In many jurisdictions, a defendant without insurance must disclose their personal assets to plaintiffs and their legal teams. This process can be invasive and costly, as it requires comprehensive documentation, legal assistance, and time.
Are my assets at risk without ERP/Tail Coverage?

If you choose to go bare and a claim is filed, your personal assets become vulnerable to seizure. Key points to consider:

  • Timing is Critical: If your assets are not already protected by a trust, LLC, or other legal mechanism before a claim is lodged, it will be too late to shield them once litigation begins.
  • Loss of Personal Property: Without adequate protection, your home, savings, investments, and other valuable assets could be at risk. The financial and emotional toll of losing these assets can be devastating, particularly for those with families or dependents.
Are there any other implications to "going bare?"

Additional Considerations of “going bare.”

  • Career Implications: Operating without malpractice insurance or tail coverage could harm your professional reputation. Employers and peers may view this decision as reckless or unprofessional, potentially impacting future job prospects.
  • Long-Term Costs: While going bare may save money in the short term, the financial fallout from even one claim can far outweigh the cost of securing tail coverage. For example, settlements or judgments can reach millions of dollars, leaving you financially ruined.
  • Peace of Mind: Beyond the financial and legal implications, having malpractice coverage provides psychological relief. Knowing you are protected in the event of a claim allows you to focus on patient care rather than potential lawsuits.
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Michael Richards

Michael specializes in sourcing the most suitable ERP/Tail Coverage at the best price. You can call him or fill out the form and he will get your message directly.

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