Occurrence vs. Claims-Made Malpractice Insurance

When getting into the world of medical malpractice insurance, there are many special coverages you can purchase. Despite the customized policies you may be seeking, there are two general types of medical malpractice insurance to compare: occurrence vs claims-made malpractice insurance.

What is Occurrence Malpractice Insurance?

An occurrence malpractice insurance policy will pay a claim if a potential incident occurred during the time of your coverage. Even if your policy is expired or canceled, an occurrence policy will cover you if the incident in question happened while under the policy. For example, if you canceled your occurrence policy in January 2020 then received a claim about an incident from December 2019—the month before, while you were still under the policy—you would be covered even though you currently do not pay for the policy.

What is Claims-Made Malpractice Insurance?

A claims-made malpractice insurance policy is basically the opposite of an occurrence policy. You must be paying for the policy and be covered by it at the time of the incident and the time the malpractice claim is filed. If you take the previous example, though you were covered at the time of the incident, you are not covered at the time of the filing. So, you would not be able to use the policy because you are not currently engaged in it. That is, unless you purchase a tail policy for claims that are reported after the policy is not longer active.

How Do They Compare?

The key difference is in the timing—the critical distinction is the coverage provided when a potential incident occurs and when a claim is filed. An occurrence policy is usually preferred by healthcare professionals; however, it is not available in all states and is often more expensive than a comparable claims-made policy. When deciding what option is best for your practice, make sure to compare prices, consider what kind of claims are common in your specialization, and what choice similar practices in your area have selected.

Choosing occurrence vs claims-made malpractice insurance can be difficult, but there are certain benefits and limiting factors to consider with each. No matter the type of coverage you are looking for, get in touch with an insurance professional at Baxter and Associates LLC to discuss malpractice insurance for healthcare professionals.