Professional Liability Specialists
With our tenure in the Medical Malpractice arena, there is rarely a question that hasn’t been answered. We tried to address the most common ones here. However, please feel free to submit a question and we will be happy to see if we can help:
What is the difference between “Claims Made” and “Occurrence” coverage?
With a Claims Made policy, you are covered for any claim (subject to policy conditions) that is filed during your policy period for a patient that you saw after your “retroactive date” and before the expiration date of your policy. If for some reason you no longer have a policy in force, you no longer have coverage for any new claim during unless you purchase an “extended reporting endorsement”. Occurrence, on the other hand, covers you for all patients seen during the policy year purchased, regardless of when the claim is filed. One of the major differences is that under a Claims Made policy, you only have coverage while the policy is in force. Under an Occurrence, you have coverage for the time period purchased indefinitely. For example purposes, under a Claims Made policy, if you saw a patient in 2009 and a claim was filed in 2011, your policy that you have in 2011 is responsible for that claim (subject to policy conditions and that your retroactive date goes back to at least 2009). Under an Occurrence policy, it will be the policy that you carried in 2009 that would be responsible for this claim.
If I switch carriers with a Claims Made Policy, do I have to buy a tail?
Usually, No. Claims made policies have a “retroactive date” (how far backwards your policy covers you) attached to them. If your new policy picks up your retroactive date, there is usually not a need to buy tail. Extenuating circumstances can apply so be sure to consult with your agent to ensure proper coverage is being provided by the new carrier.
Your firm seems more knowledgeable than our existing broker, can I switch to you in the middle of my policy?
Yes. We are happy to represent you in the middle of your policy term. Often times, we will catch areas of your coverage that are missing and will get them cleaned up before your next renewal. This also puts us in the best situation to ensure a timely renewal for the upcoming policy year.
What is a retroactive date?
A retroactive date is how far backwards your policy covers your. It is attached to a claims made policy and can be found on your Declaration Page.
What is a Declaration Page?
Most policies from a particular insurance carrier read the exact same. The only differences usually arise in the Declaration Page of the policy and the Endorsements. The Declaration page is usually one of the first pages of your policy and will include items of information such as your name, limits of liability, retroactive date (if claims made), premium, etc.
What is the difference between “tail” and “prior acts”? Also, I heard something about “nose” coverage? Can’t you insurance people use real “grown-up” words?
Due to the complexity of these terms (being facetious), these terms are often used interchangeably and incorrectly. “Tail” is the informal term for an “Extended Reporting Period”. An Extended Reporting Period applies to a claims made policy. Due to the nature of a claims made policy, you only have coverage while the policy is in force. So, if you cancel the policy and do not replace it with a policy with “prior acts” or “nose”, you will need to purchase a “tail” to extend the time period in which you can turn claims in for patients that where previously covered by your claims made policy. It essentially extends the coverage afforded by your policy for the term you purchased the extension. This time period can be for a certain amount of years or for an unlimited time. “Prior Acts” and “Nose” coverage are essentially the same thing. Both apply to a claims made policy. Again, due to the nature of a claims made policy, you only have coverage while the policy is in force. So, if you replace that policy, you will either need it to buy an extended reporting period “tail” to continue to cover you for that time period. Or, you will need to replace it with a policy with “prior acts”. This means that the new policy will take your retroactive date from your previous policy and it is now responsible for any new claim filed for a patient that you saw after your retroactive date. People will say the new policy picked up your “prior acts” or the new policy contains “nose coverage”. For example purposes, you started practice on 7/1/2000. Chances are, your retroactive date will be 7/1/2000. For the 2011-2012 policy year, you where insured with Carrier A with the 7/1/2000 retroactive date. That policy covers you for any claim filed during the 2011-2012 policy year for any patient you saw back to 7/1/2000. At the end of the 2011-2012 policy year, you decided to move to Carrier B. At that point, you have two options. You can either 1) buy “tail” or an “extended reporting period” from Carrier A to ensure you continue to have coverage for patients you saw back to 7/1/2000. Or, 2), you purchase “prior acts” or “nose” coverage from Carrier B. If you choose this option, your retroactive date with Carrier B will still be 7/1/2000 and there would not be a need to purchase tail from Carrier A.
Is it better to buy “tail” or buy a policy with “prior acts”.
This depends on the circumstances. Please speak with one of our representatives to determine what is best for your circumstance.