Key Points About Your Medical Malpractice Insurance Your Agent Should Tell You

Written by Stephen Lim Lic# 0M66738

Medical Malpractice Insurance covers physicians’ and healthcare professionals’ liability arising from disputed services that result in a patient's injury or death.  Searching for Medical Malpractice Insurance in 2020 can sometimes be challenging but finding the right broker or agent is paramount in the proper mitigation of your practice’s liabilities.  Here are some key points about your medical malpractice insurance quotes that your agent should tell you.

1.     Is the insurance quote from an admitted insurance company, non-admitted insurance company, risk retention group, or mutual protection trust group?

There are many different types of structures for insurance companies and providers for medical malpractice insurance.  Understanding the basic fundamentals of how each company operates, is domiciled, is protected or not, is important to understand how your coverage would impact you in the case of claims or insurance company insolvency.

2.     Is the quotation defense inside the limits or defense outside the limits?

Defense inside the limits means exactly that, defense costs are associated within the per occurrence limits of liability on your policy; whereas, defense outside the limits provides typically up to an additional $1 million in defense coverage costs.  Often these types of terms are listed on non-admitted and risk retention group quotes, which can be easily adjusted to be defense outside the limits sometimes at no additional premium.

3.     Is the quotation provided full consent to settle or limited consent to settle?

When a claim is brought to suit, there is an important factor about your medical malpractice insurance policy you should be aware of.  Full consent to settle provides the opportunity to continue to fight a claim, even though the insurance company wants to settle, up to the limits of liability.  Limited consent to settle gives the authority to settle on behalf of the insurance company rather than the insured.  So if the insurance company wants to settle halfway through your trial, they would have the last say if the policy is written under a limited consent to settle.

4.     What are my terms for tail coverage and how much will it be?

 Typically, tail coverage terms will be listed on the quotation the insurance company provides or are listed in the specimen policy that your agent or broker should have received with the quotation.  Tail coverage is important because most medical malpractice insurance policies are on a claims-made basis, which only covers claims that arise during the active policy period.  Tail coverage provides defense and indemnity for prior acts once the insurance policy is canceled. 

5.     Do I have payment options?  If so, do I pay any installment fees or interest?

Depending on if it’s an admitted carrier, you may finance directly with the insurance company or through a third-party “insurance premium” financing company.  Often, making payments will incur installment fees and/or interest charges based on the finance contract.  Premium financing APRs currently range from 11% to 17% and typically require at least 25% down payment.