Malpractice insurance is something that every medical professional in healthcare needs to protect their financial security. Here is what you should know before buying malpractice insurance, from the type of coverage to consent clauses.
Individual vs. Group Malpractice Policies
The first thing you’ll want to consider is whether to purchase individual malpractice insurance or join a group policy. Many healthcare providers, like nurses and technicians, opt to join a group policy that covers every professional at a healthcare facility; sometimes, the employer may require it for every employee.
In return for joining a large group policy, the premiums are typically lower than an individual policy. Still, there’s less freedom in choosing the type of coverage and provisions you want with a group policy. Even if you’re required to join a group policy, study the details and limits of the policy beforehand and raise any concerns you may have or ask if you can purchase your own insurance instead.
Claims-Made vs. Occurrence Coverage
The two major categories of medical malpractice insurance are claims-made and occurrence policies. The difference between claims-made and occurrence is the claims they cover, depending on when they’re reported and if the policy has elapsed.
In an occurrence policy, the individual is insured for the policy period indefinitely—even if the policy expires but the reported claim is from the period when the policy was active, the individual is still covered. Claims-made policies only cover incidents that happen while the policy is still active, so it doesn’t offer indefinite coverage; however, claims-made insurance policies do have other benefits.
Tail & Nose Coverage for Claims-Made Policies
Before buying a claims-made malpractice insurance policy, you should know whether the provider offers tail or nose coverage. Nose coverage is supplemental insurance that ensures the individual is covered for claims made from a previous policy—this is primarily for those changing insurance providers.
Tail coverage is another form of supplemental insurance that protects against claims from when the policy was in effect but not filed until after the policy ended. Tail coverage is mostly for those changing employers, taking a leave of absence, or retiring, and it guarantees they’re still protected should a claim arise.
The Consent-to-Settle Clause
Another key part of a malpractice insurance policy is a potential consent-to-settle clause. This provision guarantees the insurance carrier must have the insured’s consent to settle a claim with a plaintiff.
Without a consent-to-settle clause, the insurance provider can settle a malpractice claim with the plaintiff without asking the insured or even notifying them until after the settlement process is over. Since settling a malpractice lawsuit could cause reputational damage to many healthcare providers, it’s an important clause to consider.