Claims-made insurance policies cover events that happen and are reported after the particular incident during the time the policy is active. Claims-made policies, along with occurrence insurance policies, are one of the most common types of malpractice insurance offered to physicians by insurers.
Here's an example. A policy is active from September 2018 to September 2019 and its retroactive date is in April 2012. A filed claim alleges an incident occurred in September 2010. The claim would be denied by the insurer because the incident happened prior to the retroactive date.
Claims-made policies require that incidents must occur and claims must be filed during the policy period. Thus, if changing insurance, you must make sure you are fully, comprehensively covered at all times during your medical career. It is important to consider whether nose coverage or tail coverage could be beneficial to you.
Limits can differ depending on:
Also, claims-made limits do not restore each year immediately as occurrence policies do. The limits that exist when the insurance is purchased will continue to be the only limits to protect the doctor from alleged claims arising during the time the policy is in effect. Sometimes, limits of liability can be increased if you want more coverage, such as when you want your policy to focus on when files are claimed, not when incidents occur.
Claims-made policies' prices can vary by state and sometimes by area (such as rural or urban) within a state.
Premiums tend to be low for the first few years for a claims-made policy. This is because there can be a large difference between when care occurs and when a claim is filed. For instance, a “first-year” claims-made policy has the retroactive date that is the same as the policy start date and is relatively inexpensive.
Premiums will increase gradually over the years as the risk for each doctor matures. "Mature risk" usually happens at around 5-7 years.
Another thing to consider is that claims-made insurance premiums consider past experience, not future liability like claims-paid policies. Thus, they are generally less expensive.
Even though it's one of the most common forms of malpractice insurance, claims-made insurance can be inexpensive and beneficial for many doctors, particularly new ones. However, due to its strict limitations about when events occur and when claims must be filed, it is vital to ensure that you are fully covered at all times.
Contact Capson now to learn more about our quality claims-made insurance policies.