By Vanessa Orr
As a medical professional, you know how important it is to carry professional liability insurance. What you may not realize is that it’s also imperative to have your policy reviewed regularly to ensure that it covers any changes that you’ve made in your medical career. After all, joining a new practice, offering new services, or taking on a new professional role can also mean taking on extra risk.
When starting out, it’s understandable to try to save money by taking a do-it-yourself approach; however, hiring a professional consultant or healthcare attorney to review contracts and insurance policies will actually pay off in the long run.
Kyla Murphy
“For new doctors coming out of residency, having a consultant or healthcare attorney review contracts and policies can save them from legal issues later on as well as set them up for success,” said Kyla Murphy, AVP National Healthcare Practice, Risk Strategies.
For example, while an occurrence policy appears more expensive up front, it includes tail coverage. A claims-made policy increases in price every year up until the fifth year, but does not include tail coverage, which will have to be purchased if the medical provider cancels the policy, or changes practices, depending on what their contract says. This can be expensive, as tails can cost two to three times the price of the current premium.
Tom Murphy
“Retroactive coverage on a claims made policy covers medical professionals backwards in time, based on the statute of limitations that allows patients to sue doctors or any other medical providers,” said Tom Murphy, SVP National Healthcare Practice, Risk Strategies. “This is required across the board for all medical providers, regardless of their positions.”
He notes that as providers approach the end of their careers, they should also try not to move their insurance coverage in the last two to three years, as they are probably already vested in a free retirement tail.
In the case of personal liability insurance, having an expert who understands carrier considerations, such as a carrier’s financial stability, financial rating, and reputation for defense can safeguard a provider’s career. A carrier should carry an AM Best A to A+ rating, which means that they are financially stable and can provide their clients with a proper defense.
“If a provider gets involved in a lawsuit, it is a direct assault on his or her reputation,” said Tom Murphy. “When a provider is involved in a medical malpractice claim or lawsuit, it’s important to have an insurance carrier that has the reputation and the backing to protect the doctor when the rubber meets the road.”
It’s also wise to understand the specific coverage involved to see if a policy is comprehensive and meets the required limits of liability.
“Certain states require liability limits that can be as high as $1 million or $3 million, though Florida does allow a physician to practice bare if they can show proof that they can financially meet the needs of a judgement against them up to a certain limit,” explained Tom Murphy.
As careers evolve, practice profiles can change, and insurance carriers need to be kept up to date on any changes that could affect the policy.
“For example, if a family practitioner decides to add aesthetic services, which in the past have typically been limited to dermatology and plastic surgery practices, their insurance needs may change,” said Tom Murphy.
“It’s all about the who, what and where,” added Kyla Murphy. “What types of patients are you seeing, what services are you providing and where is your location? If you practice in Miami or Atlanta, that will affect your policy. If you’re a practicing OB/GYN or orthopedic surgeon, you’re in a higher-risk category.”
Medical providers sometimes forget to notify agents or insurance companies about these changes, which puts them at higher risk. For example, if a doctor in a wellness practice does not mention on their application that they provide weight loss drugs, they may find that when there is a claim, they do not have coverage.
“It’s no different than buying a Toyota Camry and putting it on your auto insurance policy, but forgetting to tell them that a year later, you bought a Rolls Royce,” said Tom Murphy. “They aren’t going to cover the Rolls if you’re in an accident. It’s a common sense thing.”
This is also the case when a medical provider takes on a new role as an expert witness or medical director, which are specifically excluded from medical malpractice policies. While some companies that hire expert witnesses or medical directors provide coverage for these roles, if not, it’s up to the provider to seek separate coverage.
It’s important to note that insurance premiums not only pay for protection, but also provide medical providers access to the carrier’s resources, which can include advice on risk management and legal issues.
“For example, if you want to dismiss an aggressive patient, you need to do it in the legal and proper way,” said Tom Murphy. “Your carrier will guide you through this, providing you with the right letter to do it properly. Carriers are a wonderful resources to help navigate different areas of your practice without spending extra money.”
For more information, contact Kyla Murphy at Kyla.murphy@risk-strategies.com or Tom Murphy at tmurphy@risk-strategies.com or call 800-966-2120.
