South Florida Hospital News
Saturday October 31, 2020

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August 2007 - Volume 4 - Issue 2


Med Mal Insurance Checklist

You are encouraged to use this checklist every year to ask important questions about your current malpractice insurance policy and insurance company, or any insurer that you might be considering.
  • What is the company’s A.M. Best rating? You should not settle for any insurer rated less than a "B+" unless there are mitigating factors that make good business sense. If the company just started in the last few years, ask about their total assets, compare that with others, and ask if they have reinsurance.
  • How long has the company insured physicians in Florida?
  • What is the history of their rate changes in your state and elsewhere? Ask about the number of rate increases or decreases the carrier has had in the past several years.
  • Are a large concentration of the company’s policyholders in a higher risk territory or specialty? If the carrier has a larger insured exposure in higher rated territories like Miami-Dade, Broward and Palm Beach counties or insure too many higher risk medical specialties, claims could soar. As a result of this exposure, the carrier could impose severe rate changes or worse, leave the state as so many did in the last five years. This creates many concerns including policyholder non-renewals, lost vesting of tails and could jeopardize the quality of defense for open claims.
  • What is the company’s policyholder surplus?
  • What is the company’s overall medical professional liability premium volume in your state and how many Florida doctors are insured with them?
  • Are the policy exclusions outlined and clearly defined?
  • Are the policy definitions clear and straightforward?
  • What are the "tail" provisions upon termination of the policy? Does the "tail" coverage offer unlimited duration or is it limited to a certain number of years? What are the retirement requirements for "tail" coverage? The policy should have provisions for vested tails upon retirement, disability and death. What is the cost of a tail?
  • Is defense coverage offered outside or inside the limits of liability? (It should always be outside.)
  • What is the claims coverage "trigger?" A "demand trigger" is so unfavorable that you should always insist on a trigger that recognizes an "incident report."
  • If you accept a demand trigger (and you often aren’t asked), the company will not defend any incidents you might report until the incident turns into a written demand or claim against you. This can cause serious problems when changing carriers. The new company, and your previous company, will exclude the incident from coverage because you had prior knowledge of and reported the incident to your previous insurer.
  • How is your corporation, professional association or other entity covered? Can you endorse the policy to properly cover a corporation for free on a shared limits basis or can you purchase separate, affordable corporate coverage? Is vicarious liability coverage included in the separate corporate policy? (It should be.) Even if you are a solo practitioner and have formed a closely held professional association, it should be named on the policy.
  • How are your employees covered? What about coverage for any skilled ancillary personnel like physician assistants or surgical assistants who are often excluded from coverage under the standard policy forms?
  • Who are the company’s defense lawyers? Are they local attorneys and do they have experience in defending medical professionals? If you are sued, will your case be handled by a senior member of the legal firm or assigned to a less experienced associate?
  • Is legal defense coverage offered for investigations by various state and federal regulatory agencies such as Agency for Healthcare Administration (AHCA), the Florida Board of Medicine and OSHA? What are the policy limits for this coverage and can the limits be increased?
  • Is the "retroactive date," sometimes called a "prior-acts date," the same as your previous policy? Your retroactive date is critical. You should personally check the date on your policy each year. Remember that when switching companies, it is usually better to keep the same retroactive date with your new company rather than purchasing a "tail" and going onto a first year claims-made policy.
  • Is your policy effective date the same as your previous policy? (It must be the same to avoid gaps in retroactive coverage.)
Matt Gracey and Tom Murphy are Malpractice Insurance Specialists with Danna-Gracey, Inc. They can be reached at (800) 966-2120.
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