Do I need tail coverage?

[deleted1100659]

If I leave my current job after roughly half a year, and go to another state to practice, how important is tail coverage if it was just a six month job I was at?

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[calvnandhobbs68]

Very important if you don't want to lose a bunch of money hiring a lawyer to defend you in a malpractice suit and even more money if you lose the suit. Do you really want to be sitting around wondering for the next 5 years or whatever the statue of limitations is in the state if one of your patients is gonna file a lawsuit at some point? I've known people who had patients wait until the very last month of the statute of limitations to file a lawsuit.

Malpractice insurance is one of those things it doesn't pay to skimp on, especially because the statute of limitations can be so long depending on the state and anyone can sue you for any stupid thing, taking up valuable time of yours to seek out a malpractice lawyer on your own and pay them out of pocket. By the time you've done that, you might as well have just paid for indefinite tail coverage. Your claims made insurer should be able to give you a quote for adding on tail coverage.

I mean, it's like life insurance or disability insurance. Are you statistically probably gonna die in the next year, probably not. But do you really want to risk your family losing millions of dollars worth of lifetime earnings if you do?

 

[deleted1100659]

Very important if you don't want to lose a bunch of money hiring a lawyer to defend you in a malpractice suit and even more money if you lose the suit. Do you really want to be sitting around wondering for the next 5 years or whatever the statue of limitations is in the state if one of your patients is gonna file a lawsuit at some point? I've known people who had patients wait until the very last month of the statute of limitations to file a lawsuit.

Malpractice insurance is one of those things it doesn't pay to skimp on, especially because the statute of limitations can be so long depending on the state and anyone can sue you for any stupid thing, taking up valuable time of yours to seek out a malpractice lawyer on your own and pay them out of pocket. By the time you've done that, you might as well have just paid for indefinite tail coverage. Your claims made insurer should be able to give you a quote for adding on tail coverage.

I mean, it's like life insurance or disability insurance. Are you statistically probably gonna die in the next year, probably not. But do you really want to risk your family losing millions of dollars worth of lifetime earnings if you do?

Yeah thats what I was thinking. This job would only be around 6 months, I wonder if it would be relateively affordable given how long I was at the job?

 

[comp1]

Tail coverage should be cheap with that time frame.

 

[Merovinge]

Yeah thats what I was thinking. This job would only be around 6 months, I wonder if it would be relateively affordable given how long I was at the job?

Yes it is priced based on how long you worked, I think it caps out in cost around three years. It should be very cheap in psychiatry and you essentially have to have it. Most future employers would cover this cost if you asked, if you are going into 1099 just pay it yourself and don't lose the sleep for a few grand.

 

[splik]

You will almost certainly required to get it if you are getting another job. Or nose coverage with your new malpractice carrier. This is assuming it is a claims made and not occurence based plan that you have. If it's occurrence base you're covered and do not need tail or nose coverage.

 

[clozareal]

Whether you should get malpractice insurance (including tail) and whether it's legally required are two different questions. There's no federal law requiring doctors to carry malpractice insurance although some states do. There are 18 states that require this and they are either 1) states that require minimum levels of insurance and 2) states that require medical professionals to have some insurance to qualify for liability reforms in their state. You'll have to look at the requirements in your state where your old job is located.

Your malpractice insurance is legally required to inform you to purchase tail insurance, and some carriers actually cover tail insurance if you move out of state (but of course won't tell you unless you ask). Everyone's financial situation is different and those who have extremely high risk tolerance will go bare if they have assets to cover any legal costs you may incur should you get sued.

Psychiatry is the least likely to be sued out of all the medical specialties at 2.6% claim rate per year and for your half year that would be an average of 1.3% chance of any claim filed. Your chances are lower if you were practicing outpatient psychiatry than inpatient/ER/IOP/PHP setting. This chance is even less than that rate when accounting for cases that are dismissed/settled, less than that of going to court, even less than that of the plaintiff winning. It's up to you with your risk tolerance, particularly as even though it's a low chance, it's can be highly financially ruinous.

There are also those who believe that going bare will mean that you'll be less of a target for being sued since the case might be dropped if a lawyer finds out that you have a lower potential for "winnable assets."

 

[deleted1100659]

You will almost certainly required to get it if you are getting another job. Or nose coverage with your new malpractice carrier. This is assuming it is a claims made and not occurence based plan that you have. If it's occurrence base you're covered and do not need tail or nose coverage.

Actually it appears the policy is an occurrence policy (next to the liability insurance it states occurence policies) . So I guess I might be fine without tail coverage?

 

[clozareal]

Yep. You don't need tail coverage if you have an occurrence policy.

 

[robellis]

Form an llc, put all assets into that llc and make your wife the sole owner, don’t get malpractice coverage and profit, you’re welcome

 

[calvnandhobbs68]

Actually it appears the policy is an occurrence policy (next to the liability insurance it states occurence policies) . So I guess I might be fine without tail coverage?

Yeah if it's occurrence based then you shouldn't need tail. Just check with the malpractice carrier. One email or phone call should clear it up.

 

[deleted1100659]

Form an llc, put all assets into that llc and make your wife the sole owner, don’t get malpractice coverage and profit, you’re welcome

being as I am finalizing a divorce that has cost me a significant amount of money, you can see how I might be hesitant to do that lol.

 

[clozareal]

Form an llc, put all assets into that llc and make your wife the sole owner, don’t get malpractice coverage and profit, you’re welcome

Not true. An LLC or any corporate structure won't protect you from a tort action (i.e., malpractice). You're sued as an individual for medical malpractice, not a company.

 

[PikminOC]

Form an llc, put all assets into that llc and make your wife the sole owner, don’t get malpractice coverage and profit, you’re welcome

Don't get divorced either.

 

[robellis]

Not true. An LLC or any corporate structure won't protect you from a tort action (i.e., malpractice). You're sued as an individual for medical malpractice, not a company.

Yeah but you have no assets so what’re they gonna take?

 

[splik]

Yeah but you have no assets so what’re they gonna take?

IF you really have no assets, they can take your future earnings.

 

[robellis]

IF you really have no assets, they can take your future earnings.

Has that actually ever happened or some paranoid hypothetical?

 

[splik]

Has that actually ever happened or some paranoid hypothetical?

it happens all the time in negligence cases (of which medical malpractice is one example).

I could see how it might theoretically make sense in some specialties in some states to go without malpractice insurance, but the cost of psychiatric malpractice insurance is comparatively low and not having it would not be a deterrent to claims since the payouts are usually fairly low. And you would have to pay all your legal expenses to defend any suits (whereas most or all of this would be paid by your malpractice carrier if you were covered).

 

[Merovinge]

Has that actually ever happened or some paranoid hypothetical?

Malpractice insurance is the cost of doing business as a Doc in the US. Even as the least sued specialty most psychiatrists are sued at least once during their career. Either you are employed and your malpractice is covered or you are in PP and should be making enough to easily pay for this with pre-tax dollars such that it is near a rounding error (or less than your CC processing fee). I can kind of understand not wanting life or disability insurance (in some rare cases), but malpractice just needs to be seen as essential.

 

[lockian]

Get tail coverage, it is absolutely crucial given the fact that you seem to have been working in a high risk setting based on your other posts. Laws aside, It is well worth it because if something goes wrong and you have no tail coverage you will be on your own for financing legal defense and liability, which will make the divorce feel like a walk in the park.

Also, check with your current job, a lot of employed jobs pay for tail coverage.