You're a new physician, looking for your first job, and you may not have been taught much about malpractice insurance in school. Unless a hospital or health network has some form of self-insurance, the following are a few things you need to know about buying medical malpractice insurance.
There is claims-made malpractice insurance
This type of policy is one when a claim must be made when the doctor was employed with the health in an organization. Once a doctor leaves his or her employment, the policy is no longer in effect. The downside to this type of insurance is that a claim can still be made against the dock for a period of time after the employment was terminated. In most states, you can sue for malpractice for up to two years after the time that it happened. This means that it is possible to be sued when you no longer have coverage. For this reason, there is insurance for this time period.
There is tail-insurance malpractice coverage
This is the coverage that covers the gap created by a claims-made policy. This policy is in effect once your employment ends with a health organization that had claims-made insurance coverage. Since the statute of limitations for malpractice is usually two years, tail insurance will cover this two-year gap. Tail insurance is a one-time purchase, and will last the length of your employment.
There is occurrence-based malpractice insurance
This type of insurance policy covers an occurrence of malpractice that happened during your employment. Once you leave your employment with the healthcare organization, any claim against you while you were employed will be covered under this type of policy. Because it is not related to the date of the claim, but only the date it happened, there is no need for tail insurance. It is, however, more expensive than claims-based insurance.
Should you buy claims-made or an occurrence-based policy
Some health organizations will have one type or the other. However, if you are given a choice between the two, it can be tricky. Occurrence coverage is a bit more expensive than claims-based coverage because you don't need tail insurance coverage, but since tail insurance is a one-time purchase, the longer you work for a hospital, the more attractive a claims-based policy will be. It's just a matter of estimating how long you plan to work at a health organization. Once you have a good estimate, the choice becomes easy.
Unless a hospital self-insures, you need to be aware of the forms of malpractice insurance: claim-based, occurrence-based, and tail insurance. With claim-based insurance, you will need tail insurance. Which form of insurance is better will need will depend upon how long you will work for that organization.
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