Nose malpractice insurance, also known as “prior acts coverage" or "retroactive coverage," provides coverage for incidents that happened prior to the beginning of the new insurance policy. It essentially involves getting a new insurance provider or employer to “pick up” your prior acts when you weren't covered at all or were covered by a different provider. This type of insurance is part of claims-made coverage.
Nose coverage can be considered the opposite of tail coverage and is generally less expensive than tail coverage.
To fully understand what nose coverage is and how it works, let's consider an example. A physician has a claims-made policy that expires in November 2018 through a previous employer. A lawsuit is filed in March 2019 by a patient who was treated in October 2018. Through the new employer, the insurance coverage begins in January 2019.
However, the doctor is given the option of nose insurance starting September 2018. This means that your nose insurance would cover this claim since it provides continuity between your last employer’s coverage and your new one. Without the nose coverage, you would be personally responsible for the claim, meaning all legal costs and settlement fees.
Limits will vary for nose coverage depending on:
However, a nose policy is needed if your claims-made coverage is terminated and you do not have tail coverage from your previous provider.
Bear in mind that there are also other challenges posed by nose coverage specifically. It can be difficult for physicians leaving one state to join a practice in a different one to acquire nose coverage. Hospital administrations or insurance providers can be hesitant or unwilling to take on the risk of events that happened outside of their system or state. In particular, different states can have different policies and laws.
Doctors can purchase nose coverage when renewing their first claims-made insurance or when changing insurance providers or employers. An additional premium is set up in progressive increases over 4-5 years. This rate increase typically starts from 35% less than the rate for full prior acts and increases each year until it reaches a “mature” rate.
Nose malpractice coverage from an employer or provider regarding prior acts can be extremely valuable. Premiums will still vary based on location and provider, but Capson can work with you to find the best rates possible.
If you're ready to sign up for nose coverage, contact us now to get your free quote.