In some policies your coverages limit of liability is eroded by the cost of your legal defense. This is of particular concern for doctors when practicing with minimum limits of $250,000 / $750,000, which many are now doing because of the high prices for coverage.
In all claims-made policies when you lower your limits of liability your entire retroactive coverage is affected. Most doctors wrongly believe that if you paid for higher limits one year, then subsequently lowered them, that any claim later reported for an incident that occurred when the higher limits were in effect would be covered at the higher limit.
Some companies do not cover the defense for regulatory investigations such as ACHA, OSHA, or those related to Medicare, Medicaid, or HIPAA. This coverage can be purchased independently if your policy does not cover such investigation defense. Only a few policies cover both defense costs as well as fines. Most policies have an internal limit of $25,000 / $75,000 for this coverage, and some companies offer higher limits for a small charge.
To protect yourself of becoming uninsurable, you need to be very cautious about reporting to their insurer incidents they may have some concern about turning into a claim. Good risk management practices dictate that you notify your insurer immediately upon a bad outcome or about s disgruntled or threatening patient. However, in this market if you have too many incident reports on your record most insurers are reluctant to offer you new coverage, so weigh very carefully if you really want to make an incident report. Once you receive an official notice of intent to sue from a patients attorney, of course you should then immediately involve your insurance carrier.
Many insurance companies will give you a free tail upon retirement if you have been insured with them for at least five years. Be careful of the restrictions on this however. You must fully and permanently retire from practice, not just start working part time or take some time off. If you do receive a free tail and then go back into practice without notifying the insurer, the tail coverage will be voided.
No malpractice insurance company will cover any punitive damages against you.
Most insurers will not cover a claim if they find that you have altered or falsified your records.
If you cancel a policy before it expires you will most likely be charged a “short rate” mid term cancellation fee. An industry wide formula is used to determine the fee. The rule of thumb used is that the fee equals ten percent of your unused premium.
Adverse medical incidents that you report to your insurance company might not be covered by them or the new insurer when you switch carriers. Always ask if your policys definition of a claim includes incident reports.
Some companies insuring Florida doctors are not part of the states guarantee fund, so if they become insolvent you will lose your coverage for even an open claim.
Some of your employees and / or skilled assistants are specifically excluded from coverage and must either specifically be added or find coverage elsewhere? A claims-made policys “tail” price is not a fixed amount but can change at the insurance companys discretion. One company recently increased their tail prices by 50% when they announced that they were pulling out of the Florida malpractice insurance market.
Claims-made tail policies are usually for an unlimited term following the termination of your policy. However, a tail policys limit of liability is applicable to the entire extended period and not reinstated every year like the normal policy limits. For example, if your tail policy limit is $250,000 / $750,000 this limit will apply to all the claims made against you for the years following your policy termination. Most companies never allow you to purchase tail limits higher than your expiring policy limits, so carefully consider increasing your limits prior to terminating your policy and purchasing a tail.
Because of the laws of Florida, insurance companies can settle a case against the wishes of an insured physician.
A legal defense-only insurance company can be formed in the state of Florida with only $50,000 in capital, so their financial stability can be quite fragile. The capital requirement of a normal medical malpractice insurer is usually a minimum of $5,000,000.
Some malpractice insurance companies will not even defend you if sexual misconduct is alleged, or if you alter your records.
An insurer sometimes offers deductibles, either for indemnity only or for indemnity and legal expenses. The difference is that with an indemnity only deductible you would only pay the deductible amount should your insurer pay a claim. With the indemnity and legal expense deductible you would pay the first dollars of legal fees in defense of any claim against you. “Evergreen” letters of credit are often required by the insurer to guarantee payment of the deductibles.
Almost all policies exclude coverage for your activities as a medical director. To get coverage you must usually buy it from the institutions insurer or purchase a stand alone policy.
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