Chapter 2: How Insurance Can Save Your Medical or Healthcare Practice Millions
Part 1: Malpractice Insurance for Healthcare Professionals
Malpractice Insurance and Claims-Made Coverage: Special Notes
Most Malpractice Insurance policies are offered on a "claims-made" basis. Traditionally, this means that you can only receive compensation for covered events if your policy is in force both at the time of the incident AND when the claim is reported. (For a detailed explanation of claims-made coverage, read our blog post "What Is Claims-Made Insurance Coverage ?")
In most cases, a claim is any notification presented to you — be it an email or a conversation — about an incident that could be covered by your Malpractice Insurance. For example, if one of your patients says they feel they've been the victim of your negligence, that conversation could constitute a claim — even if the patient doesn't move forward and file a Malpractice lawsuit.
But for the sake of this scenario, let's say your patient does file a lawsuit. You treated your patient and a medical accident happened on July 1, 2008, but that patient waited two years to tell you that your negligence is to blame for their continued physical suffering. This claim happened on July 1, 2010, and you promptly notified your insurer. However, the lawsuit over the alleged incident was not filed until July 1, 2012. This claim would be covered by:
- A claims-made Malpractice policy covering 2010, IF the policy covers potential claim notices AND the policy's retroactive date is no later than July 1, 2008.
- A claims-made policy covering 2012, IF the policy defines claims as those initiated by a third party with a demand for money, AND the policy's retroactive date is no later than July 1, 2008.
The takeaway here is that you must carry Malpractice Insurance continuously. You don't want to leave your practice uninsured, only to have an incident from years ago lead to a lawsuit.
This is pretty complex stuff, so if you have questions about how claims-made status affects your Malpractice Insurance benefits, don't hesitate to contact an allied health insureon agent at 800-688-1984.
Next: Malpractice Insurance Policy Limits for Healthcare Professionals