Author: Chris Baxter

We don’t like to think about bad days and disasters, but they’re a part of life. For businesses like medical practices, there are many ways that a mistake or accident could exceptionally damage their revenue and financial security.

That’s why there are many different types of medical insurance to help protect practices in worst-case scenarios. Our guide will break down some of the most critical coverage policies that every medical practice should own or seriously consider.

#1: Professional Liability Insurance

Professional liability insurance is perhaps the number one type of medical insurance you should prioritize to protect your practice. Otherwise known as medical malpractice insurance, professional liability insurance protects practices if errors from staff members result in patient suffering or death.

Medical malpractice litigation comes with the territory of medical practices, and without sufficient liability insurance for health care facilities, your practice could be on the hook for substantial damages. The average successful malpractice claim means hundreds of thousands of dollars in damages. Practices must have liability insurance to ensure a mistake and malpractice claim doesn’t bankrupt them.

#2: Property Insurance

A medical practice, big or small, is like any other brick-and-mortar business—it contains valuable property inside its walls like medical equipment and furniture. Property insurance covers damaged property and equipment in medical practices from accidents, natural disasters, or criminal activity.

It may not be the most important aspect of medical practice, but it’s hard to attract and keep patients comfortable without some furniture! Property insurance is there to replace your property quickly should the worst occur, from fires to theft.

#3: Business Interruption Insurance

Business interruption insurance is like a type of property insurance in that it deals with damage to the physical property of a practice. However, instead of covering the damages to the property, business interruption insurance covers the loss of income of shutting down a practice due to property damage.

If your practice ever suffers severe property damage, property insurance may replace some valuables, but what about the loss of income from closing the business for days, weeks, or months? Business interruption insurance supplements your practice’s income so you don’t have to worry about paying for rent or utilities while your business recovers.

#4: Worker’s Compensation Insurance

Worker’s compensation insurance is reimbursement for the business should an employee become ill or injured on the job. The insurance can cover medical expenses and replenish wages for workers who can no longer perform their duties.

Workers’ compensation laws vary from state to state—in some, it’s legally required, while in others, it depends on the number of employed workers and other factors. Whether or not you’re legally required to procure worker’s compensation insurance, it’s still valuable coverage for any small business, especially a medical practice.

#5: Practice Overhead Insurance

Are you a large revenue generator for your practice? For small businesses that would suffer greatly should the owner be absent, practice overhead insurance helps cover business overhead expenses.

Practice overhead insurance is different from disability income insurance as it doesn’t directly supplement an individual’s income. Instead, it helps cover overhead expenses of the practice. If your business would struggle significantly without your presence for days or weeks, you’ll want to consider practice overhead insurance to ensure overhead bills don’t get out of hand.

Overhead expenses that practice overhead insurance covers typically include:

• Utilities
• Rent
• Staff salaries
• Property taxes
• Accounting/legal fees
• Professional dues

#6: Life Insurance

It may seem morbid, but there’s no guarantee of tomorrow for anyone—and medical professionals know this, especially. That’s why life insurance is also critical for medical practice owners should the worst occur.

In the case of death, life insurance helps to cover costs and expenses for beneficiaries, including business partners. If you’re in a practice with significant partners, it’s wise for all partners to have life insurance policies in case the worst should happen.

#7: Business Auto Insurance

Business auto insurance is for practices that use vehicles as part of everyday business. If you’re a doctor who makes house calls, business auto insurance would be a good idea in case you should get into an accident while driving for work.

Or, if your practice uses company vehicles like vans for transporting employees or patients, business auto insurance ensures it’s protected should an accident or theft occur. Most personal auto insurance policies don’t cover losses or damages if a vehicle is used for business purposes. Business auto insurance covers this gap for automobiles.

Bonus Insurance Coverage for Practices to Consider

Those are some of the most critical insurance policies for medical practices, but there are still others that practice owners should consider. Two worth mentioning are employment practices liability insurance and employee disability insurance.

Employment Practices Liability Insurance

While you obviously believe in your staff and trust them to make the right decisions, you don’t want one of their mistakes to cost your practice’s financial security. Employment practices liability insurance covers businesses should an employee file litigation against the practice or another employee.

The litigation can be against the practice for wrongful termination or discrimination, or it could be against an employee for workplace harassment. The insurance covers legal defense costs and possible damages caused by the lawsuit. Hopefully, you never have to use it, but it’s always better to be safe than sorry.

Employee Disability Insurance

If you have a rather small practice with only a handful of medical professionals and revenue-generators, you understand that every employee is crucial to the practice’s operation. If an employee for a small practice is sick or injured, it could mean a sizable hit to the practice’s revenue.

Employee disability insurance differs from worker’s compensation since it covers lost revenue due to an employee suffering an injury or sickness outside the workplace. The policy also covers the loss of revenue from a missing employee so workers and practice owners have better peace of mind. Plus, it doesn’t require a disability, just enough injury or illness for the medical professional to be unable to see patients or perform their duties.

Hopefully, our guide has enlightened you on some of the key insurance policies that every medical practice should have, no matter its size or specialty of medicine. You may not think you need some of these insurance policies, but all it takes is one bad day to devastate a medical practice—unless it’s covered with insurance.

If you’re interested in learning more about medical practice insurance or purchasing a medical malpractice insurance policy, contact the experts at Baxter & Associates.

Malpractice insurance is, unfortunately, a requirement in many professions. Our guide explores the most common professions that utilize malpractice insurance below.

Primary Physicians

The most common profession for malpractice insurance is the primary physician in medical treatment. It’s easy to see why—healthcare often comes with life-and-death stakes, and if a physician makes a diagnostic or therapy error, it could lead to severe patient suffering or death.

That’s why liability insurance for healthcare facilities is essential for any hospital or care facility with primary physicians—it’s only a matter of when, not if, a malpractice claim is filed. Doctors are incredibly skilled and educated but still make mistakes like the rest of us. Without sufficient coverage, one physician’s mistake could cost them and the healthcare facility they practice in.

Attorneys & Lawyers

It’s not just medical professionals who have to worry about malpractice—legal professionals often face malpractice claims too. If a lawyer’s client is unhappy with their care and services, they can file a malpractice suit for damages in the thousands or millions of dollars. While malpractice insurance isn’t required in some states, it’s vital for practicing attorneys to have some form of liability insurance.

Examples of why a client may file a malpractice claim against their attorney include:

• Failing to disclose a conflict of interest
• Not communicating with the client
• Missing court dates
• Missing statutes of limitations

When a court case could decide a person’s life and liberty, lawyers can become targets for litigation afterward.

Nurses

Nurses may not have the same diagnosis and treatment responsibilities that a primary physician may have over a patient, but they handle much of the day-to-day treatment. Since nurses are not as responsible, they’re not as often named in malpractice litigation but still get targeted frequently.

Much malpractice litigation against nurses involves administering medication to a patient—either the wrong drug, the wrong amount, or the failure to administer medication. With nursing personnel stretched thin across the country, nurses will likely face greater malpractice claims in the future.

Nurse Anesthetists (CRNA)

All nurses can face litigation, but one profession facing a growing number of claims is CRNAs. A CRNA works directly with an anesthesiologist to administer anesthesiology and is responsible for their well-being before, during, and after surgery.

CRNAs are in demand now more than ever before as anesthesiology becomes a growing medical field—but with this growth is also an increase in malpractice litigation. Typically, the anesthesiologist is targeted, but CRNAs can be just as culpable if a patient is to suffer or die while administered anesthesia.

Chiropractors

The stakes are slightly lower for chiropractors than typical physicians or nurses, but chiropractic malpractice litigation is still common. A chiropractor can be sued if their spinal manipulation treatment harms or immobilizes a patient or if they fail to diagnose an illness or injury in the patient.

Common injuries that result in chiropractic malpractice claims include:

• Nerve damage
• Recurring headaches
• Disc herniation
• Muscle weakness
• Spinal stenosis

These professions are all different, but what they share is that they need sufficient liability insurance to protect them in case of malpractice litigation.

Along with education, skills training, and hands-on experience, chiropractors need a few things for their careers to thrive. Malpractice coverage is essential for medical professionals, and in this guide we’ll explain why chiropractors benefit from malpractice insurance and some of the basics of malpractice insurance.

What Is Malpractice Insurance?

Before we get into why all chiropractors can benefit from malpractice insurance, what exactly is malpractice insurance anyway? Malpractice insurance is particular professional liability insurance catered explicitly to medical professionals and businesses, like chiropractors.

A medical malpractice claim can arise from many situations, but most commonly from medical services that result in patient injury or death. It’s essential for medical professionals to have malpractice insurance—whether they’re a physician, nurse, chiropractor, or any other professional—as a malpractice claim could cost the defendant hundreds of thousands of dollars or more.

Most malpractice insurance covers costs such as:

• Attorney fees
• Arbitration costs
• Settlement costs
• Medical damages
• Chiropractic License Investigation defense
• Defense for Billing errors

There are two types of policies medical professionals can choose from in malpractice insurance: claims-made or occurrence coverage.

Claims-Made vs. Occurrence Malpractice Insurance

When a medical professional, like a chiropractor, chooses malpractice insurance, they must choose between claims-made or occurrence coverage. But what’s the difference between these coverages, and which is better for chiropractors?

Claims-Made Policy

A claims-made policy only provides coverage for incidents that occur and are reported while the insured holds the policy with the insurance carrier. In essence, the incident and the claim filing must happen while the policy is still active for the claim to be covered.

Pro Tip: If there’s a gap of time between an old and new insurance policy and you don’t want to be vulnerable to claims, you can purchase tail coverage.

If, for example, a chiropractor has claims-made coverage for 10 years but then retires and lets their policy expire, they would no longer be covered for those years. A malpractice claim that’s reported and filed five years later, when the policy passed, would not be covered by insurance if the policyholder allowed the coverage to expire.

Most malpractice insurance policies are claims-made, as they’re more affordable than occurrence coverage.

Occurrence Policy

An occurrence malpractice policy differs from claims-made because the policy could expire, but the policyholder would still be covered for the time they owned the policy. Let’s return to the example we used in the claims-made section.

If a claim is filed five years into a chiropractor’s retirement but had an occurrence policy, he would still be covered. An occurrence policy is a lifelong coverage, even if the policy itself later expires—the policyholder is always covered for that period when the patient had the treatment.

Occurrence policies may be more extensive in their coverage, but they’re also typically more expensive, making them less common than claims-made coverage.

Do Chiropractors Need Malpractice Insurance?

Chiropractors aren’t conducting intensive medical procedures or life-altering diagnoses, so do they need malpractice insurance? The answer is yes!

Like any other medical professional, chiropractors are sometimes sued by patients and patients’ families for damaged and alleged neglect. Chiropractors deal with spinal manipulation, and sometimes patients blame chiropractors for not solving their spinal issues.

Damages and compensation can result in thousands or millions of dollars, so if a chiropractor isn’t covered with chiropractor professional liability insurance, one claim could financially ruin them.

Types of Malpractice Claims Against Chiropractors

While good communication and documentation can help you avoid chiropractic malpractice claims, they still happen. Malpractice claims are particular to the individual litigant, but most claims against chiropractors fall under a couple of categories: a failure to diagnose and harm the patient from treatment.

Failure To Diagnose

One of the most common medical malpractice claims in the industry is a failure by a physician to diagnose an illness or injury. Failure to diagnose is also a common complaint against chiropractors, although not as prevalent as other medical specialties.

A chiropractor is more limited than a typical physician in a hospital or healthcare facility because they have fewer resources, like X-rays and other diagnostic tests. Plus, patients are often referred to chiropractors by physicians, so the original physician is typically liable if an initial diagnosis is missed.

But there are still cases where a chiropractor was found liable for failing to diagnose a spinal injury, leading to further pain and damage to the patient.

Harm to the Patient From Treatment

The more common malpractice claim against chiropractors is harm to the patient from treatment. We all know how critical spinal health is to our quality of life, and an error in treatment or diagnosis can lead to severe consequences for the patient.

Some common side effects of ineffective chiropractic treatment include:

• Neck injuries
• Nerve damage
• Herniated discs
• Soreness
• Headaches
• Stroke

These types of injuries are rare, but they do happen and can be caused from chiropractic treatment errors. Patients will rightly look for compensation for their suffering when these injuries happen, and the chiropractor will most likely be found liable.

Why All Chiropractors Benefit From Malpractice Insurance

All Businesses Have Risk

There’s risk involved in any business, whether it’s a chiropractic practice, an autobody shop, or a restaurant. Every business should carry professional liability coverage, but chiropractors especially need the protection to ensure financial security. It’s one of the most effective ways to reduce risk for your chiropractic practice.

Responsible for Patient’s Health

A chiropractor may not have the same responsibilities as a surgeon or physician, but they still control the health and quality of life of a patient in their hands. You don’t have to be a medical expert to understand spinal health’s importance to your overall health!

A patient trusts a chiropractor to help them feel better, and if a mistake is made, the results could cause severe damage and suffering to a patient. A chiropractor can’t assume they’ll be perfect their entire career and never make a mistake—they need safety nets and insurance coverage should problems arise.

Protect Themselves and Their Business

Many chiropractors own their businesses and are small business owners. A threat to their career, like a malpractice claim, doesn’t just threaten themselves but their entire business and financial security.

As the owner of a practice, a chiropractor is directly responsible for what occurs in their practice. Without insurance, it could mean they’re liable for injuries sustained on the premises they’re not involved in but still accountable since it’s their practice. Stay protected and preserve your future with medical malpractice insurance. For more information and a free quote, contact Baxter & Associates today!

One of the necessities of practicing in the medical field is having malpractice insurance. But how does one get malpractice insurance? We can help by guiding you through the necessary steps to acquire malpractice insurance.

Step #1: Find an Agent

The first step you should take to have malpractice insurance is finding an experienced professional who can help guide you through the process. Insurance on its own is often complicated and confusing, especially for those not familiar with the ins and outs of malpractice insurance.

An independent agent will know the coverage you need and where to look for the best options. Even your profession can affect your coverage, whether it’s chiropractic malpractice insurance or personal liability coverage.

Step #2: Review Coverage Options & Quotes

Once you’ve explained what you’re looking for and your budget to your agent, they’ll put together some quotes and options. These first quotes are initial options, and you can view them as a starting point to work from to find the perfect coverage.

This step is where you can narrow down your options and fine-tune your preferences regarding premiums, policy limits, or occurrence vs. claims-made coverage. You may find that you won’t get exactly what you’re looking for, but trust that your agent can find you the best deal.

Step #3: Submit an Application

After review, it’s time to select an insurance carrier and move forward by applying. Your agent will guide you through the application process and help you gather any information you need.

The insurance company should reply to your application with a decision to accept or reject relatively quickly, typically in under a week.

Step #4: Consider Offers & Bind Coverage

When the carrier accepts your offer, they will respond with some quotes and terms for your policy to review and consider. You should already know what to expect, and there shouldn’t be any surprises at this step.

This step is also where you can bind your coverage. Binding means that while the contract may not be official yet, you’ve bound the insurance carrier to you, and they will cover you from that date and time forward.

Step #5: Pay Premium and Confirm Policy

You’ve applied and agreed to the terms—all that’s left is to make it official with your first premium payment to bind coverage. Most insurance providers offer convenient payment plans.

Congratulations, now you’re protected with malpractice insurance! If you have further questions about malpractice insurance, consult with the experts at Baxter & Associates.

Physicians are some of the most well-educated and trained professionals, but they’re still human and make mistakes. Even in healthcare, errors happen that have consequences, which is why medical practice liability insurance is critical for individuals and facilities.

We’ll go over some of the most common causes of malpractice lawsuits for doctors, ranging from simple mishaps to more complex mistakes.

Misdiagnosis and Delay in Diagnosis

The number one cause of malpractice lawsuits for doctors is diagnosis. Although physicians are highly trained, educated, and skilled, they sometimes get it wrong or don’t diagnose an illness quickly enough to prevent suffering or death.

Misdiagnosis is when a physician gets the diagnosis wrong—often, this occurs from not knowing the patient’s medical and family history well enough. A delayed diagnosis is when a doctor is correct in their diagnosis, but it’s too late, typically because of a delay in ordering a test or recommending a specialist.

Failure To Treat

Along with misdiagnosing a patient, sometimes a physician fails to see the injury or illness in a patient and fails to treat them, resulting in injury or death. Sometimes illness symptoms are so minor at first that they can seem like typical aches and pains any average person would have.

One example is a patient experiencing minor chest pains—it’s easy for a doctor to assume it’s simply heartburn, as most signs point toward that diagnosis. But sometimes it can be a prelude to a more severe illness; and before a physician can administer treatment, it’s too late.

Childbirth Injuries

Childbirth is a wondrous journey for many that goes off without a hitch, but there’s still the potential for pregnancy, labor, and delivery problems. Such problems can arise in the mother or the fetus and appear minor on the surface but belie deeper issues.

Malpractice lawsuits from childbirth injuries can include failure to perform prenatal tests, failure to execute a c-section, or the improper use of birthing tools like forceps.

Medication Errors

Medication is an essential aspect of medical treatment, and with physicians prescribing so many medications to so many patients every day, it’s logical that someone can make a mistake occasionally. Medication errors is an umbrella term that can include many different types of mistakes, including:

• Misdiagnosis and prescription of wrong medication
• Incorrect dosage (overprescribing)
• Allergic reaction to a medication
• The patient is administered the wrong dosage/medication

Surgical Errors

Like administering medication, surgeries are something that happens every day, and even the most skilled surgeons have slip-ups. Some examples of surgical errors that have resulted in lawsuits are surprisingly simple, like:

• Leaving surgical tools inside the patient
• Performing surgery on the wrong patient
• Performing surgery on the wrong body part

It just goes to show that it’s always wise to double-check before starting your work!

Claims-made coverage is one of the most common insurance policies for professionals. If you’d like to learn more about this type of coverage, we’ve got you covered with the key things you need to know and the benefits of claims-made insurance policies.

What Is a Claims-Made Insurance Policy?

What do people need to know about a claims-made insurance policy? Claims-made coverage is a form of professional liability insurance from a malpractice insurance agency. Many professions require professional liability insurance, but it’s especially common for medical professionals.

Essentially, a claims-made policy covers the insured only when the coverage is active. So, if you have a claims-made policy for three years, you’re protected for as long as that policy is in effect—if it expires, you’ll need to get a new policy to stay covered.

How Is Claims-Made Different From Occurrence-Based Coverage?

Under professional liability coverage, applicants can choose between claims-made or occurrence-based coverage, but what’s the difference? The significant difference is that claims-made policies are more restricted, while occurrence-based policies will always cover the insured even after the policy lapses.

For instance, if you had an occurrence-based policy for two years, you would always be insured for those two years even if the policy expires. A claim could be filed ten years later, but if it falls within that period where you had occurrence-based coverage, you’ll still be covered.

A claims-made policy only covers you if the procedure is still active. If you let your policy expire, you won’t be covered for the time you were insured—you’ll need additional or retroactive coverage.

What Are the Benefits of a Claims-Made Insurance Policy?

Claims-made policies are especially prevalent in the healthcare industry. Why do medical professionals choose claims-made insurance—what are the benefits?

More Affordable

The most straightforward answer is typically the correct one, and in this case, most choose claims-made policies because they’re more affordable. A claims-made policy may not offer the continued coverage of an occurrence-based policy, but it makes up for it by providing lower initial premiums.

The lower premiums benefit individuals and facilities purchasing coverage for their staff in a group policy. The initial lower premiums free up cash flow for businesses and individuals.

Add Extended Coverage

There are ways to add extended coverage to a claims-based policy through retroactive and tail coverage. Retroactive coverage means that your policy also covers claims made before the coverage went into effect, so there are no gaps in coverage.

Tail coverage goes the other way, covering you after your policy is expired. Tail coverage is often utilized as a stopgap between an old insurance carrier and a new one to ensure the individual is always protected.

Those are the basics and benefits of claims-made insurance policies, but there is much more to know if you’re interested in purchasing coverage. If you’d like to learn more, consult the experts at Baxter & Associates, who can help you get the insurance policy that best fits your needs.

As healthcare professionals, we all strive to help our patients recover and move on to live better lives. Unfortunately, things don’t always end up that way. Make sure you’re prepared and protected by following our tips for handling bad patient outcomes in healthcare.

Continue reading Tips for Handling Bad Patient Outcomes in Healthcare

Medical professionals are some of the most well-educated and highly skilled workers, but that doesn’t mean mistakes don’t happen. That’s why many choose malpractice insurance should something go wrong that leaves them liable.

Like all medical professionals, physician assistants need malpractice insurance, and our explainer will break down the key reasons why.

Nobody’s Perfect

Although highly skilled and educated, physician assistants (PAs) are still human, which means they’re not perfect. PAs make mistakes at work like anyone else at their job, including other medical professionals.

Hospitals and medical facilities ask PAs to do a lot, from ordering tests to examining patients and administering treatments. Even the best PAs can have the occasional slip-up. The difference is that when mistakes happen, there can be dire consequences that result in suffering or even death. Errors are often inconsequential, but PAs need insurance to protect their financial future and career when oversights have more profound effects.

Increased Responsibility

PAs operate in a crucial but unique area of healthcare, performing many of the same duties that would fall to a certified physician. Initially, PAs originated in communities that lacked doctors or were overrun with too many patients for the local physicians to handle.

Over the decades into the 21^st century, PAs have taken on more responsibilities to offset shortages in physicians and nurses. With more responsibilities and duties, PAs are often stretched to their limit, making them more susceptible to mistakes.

Claims Are on the Rise

Although they may not be the target for as many malpractice claims as physicians, PAs still get sued and have been named as defendants more often recently. Studies show that between 2017 and 2019, PAs were targeted in malpractice litigation over 200 times every year, which is a substantial increase from earlier figures, which were around 70 in the year 2000.

Malpractice insurance for health professionals like PAs is essential to ensure that their career and financial future aren’t ruined by one mistake and malpractice claim. Monetary compensation for a successful claim can reach six figures, and without proper insurance, PAs and medical professionals can be left to pay that sum themselves.

Clearly, physician assistants need malpractice insurance as much as physicians and medical professionals do. PAs need to ensure their future is protected.

Whether your chiropractic practice is brand-new or has been around for years, there’s always room for improvement. We’ve put together four helpful pointers to help improve your chiropractic practice, including business advice and tips for patient interaction.

Continue reading 4 Pointers To Help Improve Your Chiropractic Practice

If you need medical malpractice liability insurance, finding the right policy can be a challenge. When you’re not familiar with basic terms of malpractice insurance, it can all be a confusing blur.

In our guide, “Malpractice Insurance 101: What To Look For When Buying,” we’ll go through the crucial terms and policies that medical professionals should know when choosing an insurance carrier and coverage.

Occurrence vs. Claims-Made Policies

There are two types of professional liability coverage for medical professionals: occurrence and claims-made policies. Each policy has its benefits and disadvantages, so we’ll break down the vital info you need to know before deciding.

Occurrence Policies

Occurrence policies cover incidents during the policy period regardless of when the plaintiff files the claim. Essentially, no matter when the claim is filed, an occurrence policy covers events that occurred during the policy period, even if your policy is expired or terminated.

For example, suppose you had an occurrence policy in 2017 that expired in 2020. Then, in 2022, a malpractice claim is filed against you for an incident in 2017. Even though your policy has expired, you’d still be covered because the claim is for an incident that occurred during the coverage.

Pros

The primary benefit of occurrence coverage is that you don’t have to worry about your policy expiring to maintain your protection. If you plan on only working in the medical field for a few years before moving on to something else or retiring, occurrence coverage could be your best option, as it doesn’t require extended coverage when the policy expires.

Over time, the total costs of occurrence coverage balance out to about the same as a claims-made policy.

Cons

Occurrence coverage is not as standard as claims-made policies because it’s challenging for insurers to estimate claims costs years or decades after a policy expires. Occurrence policies are also typically more expensive for the first couple of years until the policy reaches maturity.

Claims-Made Policies

As opposed to an occurrence policy, a claims-made policy only covers the insured for incidents that happen while the policy is still active. Once the policy is terminated, so is the coverage, unless additional “tail” or “nose” coverage is purchased afterward.

In the same example of a claim filing before, a claims-made policy would not cover an incident that occurred years prior if the coverage is no longer active, even if the incident happened while the policy was in force.

Pros

Claims-made policies are much more common than occurrence ones and are typically less expensive in the initial years of coverage. The lower premiums allow the insured to have more cash flow, so they’re generally popular with businesses and facilities.

Cons

The disadvantage of a claims-made policy is that it’s only effective when still active. The insured must keep up with the policy to ensure that there are no gaps in coverage. Once the coverage expires, tail or nose coverage is recommended to ensure you’re still protected from future litigation.

Tail vs. Nose Coverage for Claims-Made Policies

Tail and nose coverage are both additions to claims-made policies and refer to extended coverage of the insured once a policy expires. We’ll explain what each policy means and how they’re different.

Tail Coverage

A tail policy covers incidents that happened when the insured had an active claims-made policy, but a claim was not filed until the policy’s expiration. For example, if you’re sued for an incident that occurred years prior while working but have since retired and therefore don’t have an active policy, tail coverage will still see you’re protected.

If you plan to take a leave of absence, retire, switch employers, or change your insurance, tail coverage will ensure there are no gaps in your coverage.

Nose Coverage

A nose policy, also known as “prior acts,” functions similarly to a tail policy, but instead, it’s an alternative if you’re purchasing coverage from a new insurance carrier. A nose policy covers any claim before your new policy activates, but after your previous policy expires.

Typically, nose coverage is more affordable than tail coverage, but every individual policy differs. It can be confusing to differentiate the two policies; a simple way to tell them apart is knowing that tail coverage comes from your old insurance carrier, while nose coverage comes from your new one.

Individual vs. Group Policies

Along with occurrence and claims-made policies, you’ll also choose between an individual and group policy. The two types of policies are very distinct, so we’ll break down what you need to know for each.

Individual Policies

An individual policy is what it sounds like—a policy purchased by an individual which covers them, and them alone.

Pros

The primary benefit of an individual policy is the control it offers—you would control the proof of insurance, and you don’t need to rely on an employer to verify your coverage. Individual policies are especially beneficial if you move onto another employer or retire, and a claim comes up years later.

As the holder of an individual policy, you’re still covered when working at a new job, at an additional job, or when volunteering. Plus, as an individual policyholder, you don’t have to worry about possible conflicts of interest in a group policy.

Cons

You don’t have to rely on others in an individual policy, but you also don’t have the same strength in numbers. There is no limit of liability in an individual policy as you don’t share coverage with other employees. Typically, individual policies are more expensive than group policies.

Group Policies

Group medical practice liability insurance is when all hospital, clinic, or other facility employees are covered by the same policy together. Some employers require that their employees join the group liability insurance to work at the facility.

Pros

Employers favor group policies as they make claims and litigation more streamlined. A single attorney represents all employees to manage the suit instead of numerous parties each negotiating, allowing for a more streamlined process.

Cons

As an employee, a group policy means that you’ll have less control than an individual policy. It also won’t cover you when you work outside your direct employers, such as an additional job or volunteer work.

If you are part of a group policy, you should:

• Procure a copy of the entire policy, or at least the certificate of insurance
• Verify you’re listed by name on the policy
• Understand if it’s an occurrence or a claims-made policy
• Obtain copies of the policy every year (even after you’ve left the employer)

Insurance Carriers and What To Look For

Once you’ve decided what type of policy best suits you, it’s time to browse the many insurance carriers available. If you’re joining a group policy, you won’t have a choice, but you’ll have many options if you’re hunting for an individual policy.

While researching, it’s essential to evaluate the carrier’s financial strength. Independent agencies such as A.M. Best & Company rate insurance carriers on grades such as Excellent and Good. Avoid any company with a rating below Excellent, even if it means saving a few dollars.

Medical liability insurance is tricky for people to understand, but we hope our guide on what to look for when buying malpractice insurance has helped make malpractice insurance easier to understand.