Mr. Hat

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Dec 20, 2006
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I'm looking into some moonlighting opportunities currently. Part of this is assessing malpractice coverage, and there's something I'm confused about. So I think I get the difference between occurrence and claims made policies in general. I understand that for a claims made policy to cover me in the event of a lawsuit it has to 1) Have been effective the date of the malpractice occurrence 2) Must still be my insurer when the claim is filed. My understanding is that they can become "no longer my insurer" by virtue of a lapsed policy or if I have switched to another carrier because of a change in job or practice location.

This is where I get confused - lots of people work multiple jobs, thus are covered by multiple policies. So what determines if you are still "at a job" and thus covered by the group's policy? Let's say I take a moonlighting gig with a place that has a claims made policy. When residency finishes I stop moonlighting there because I've taken a full-time job. The next month or the next year someone sues me related to that job. Can that employer say "Oh yeah, Mr. Hat is still on our books as an employee here", even though I haven't worked a shift for them in a year? Or is there some sort of litmus test for employment, like you have to actively be working shifts? I ask because a place I'm looking at does not provide tail coverage (which should probably be a huge red flag), but assures me that they will keep the policy and "keep me on their books".

Anyone have some words of wisdom for me?
 

Birdstrike

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Dec 19, 2010
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Start with this. If you have occurrence coverage and always have had occurrence coverage, you're fine. In other words, if you get hit with a claim, you're covered by whoever you were paying for the occurrence policy when the incident occurred, hence the name "occurrence" coverage. It doesn't matter who you work for for when or where, if you were paying for occurrence overage, when it occurred, your covered indefinitely, no matter where you go, who you end up working for and in what capacity.

Claims made is covered by whoever you're paying for insurance when the claim is made, not when the incident occurred. So, if you're at the same job, and same malpractice company when you get hit with a suit, you're covered. If you leave jobs and change insurance then under claims made, you therefore detach yourself from that insurance company and they no longer cover you. Therefore, you've then got to pay someone to cover you until the statute of limitations is up, ie, cover your "tail."

Why? The new claims made company isn't going to cover you for three years of patients and associated liability after paying one day, one month or one quarter's worth of premium. That would be a losing proposition. That's like expecting to by hurricane insurance and getting a new homeowners insurance company to cover you for any hurricane that hit you in the three previous years, and future years.

Also, don't tie the malpractice insurance policy to your job. The coverage has nothing to do with your job. The coverage is for you, not your job. They may write the check to pay for your policy (out of the monies they would otherwise have been available to pay you, ie, out of the physician salary pool) but the insurance company doesn't care where you work. They just care that the policy is being paid for by you, or by someone on your behalf, and that you're practicing within your scope of practice, ie, emergency medicine. They don't care where.

The difference in the types of coverage all comes down to the statue of limitations, 3 years in many states. Who will cover you during that 3 year trailing delay where claims could still hit? Occurrence will. Claims made won't (allows them to advertise and charge a lower rate). But they will, if you buy extra coverage to cover your "tail" for those 3 statute-of-limitation years.

Think of it like auto insurance. You only need one policy to cover you for driving. You don't need to buy separate car insurance each time you drive your friends car, a rental car, etc. Nor do you have to get a new policy every time you drive on a new road or in a new state.

All that in a nutshell = Get occurrence and no worries. Get claims-made and you're paying for tail coverage any time you switch to a new policy.
 
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Groove

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Malpractice clauses can be very ambiguous so make sure it's nailed down. I've found clauses for CMGs or big locums companies are fairly standard with reasonable language. The private group contracts can be anything. I turned down a very lucrative job not long ago because of nothing more than their unwillingness to put in a tail policy. They had something they called "continuous claims based coverage" yet no language that guaranteed coverage until adult/peds statute of limitations and hospital legal was unwilling to negotiate. Those types of things are just deal breakers for me. Occurrence or claims WITH tail are standard in EM contracts and don't sign anything that states otherwise.
 

turkeyjerky

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Malpractice clauses can be very ambiguous so make sure it's nailed down. I've found clauses for CMGs or big locums companies are fairly standard with reasonable language. The private group contracts can be anything. I turned down a very lucrative job not long ago because of nothing more than their unwillingness to put in a tail policy. They had something they called "continuous claims based coverage" yet no language that guaranteed coverage until adult/peds statute of limitations and hospital legal was unwilling to negotiate. Those types of things are just deal breakers for me. Occurrence or claims WITH tail are standard in EM contracts and don't sign anything that states otherwise.
Agree completely. The market for EPs is too good right now for you to even consider anything less.
 
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goodoldalky

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Occurrence or claims WITH tail are standard in EM contracts and don't sign anything that states otherwise.
This is all you need to know. Additionally the cost of covering your own tail and paying for that out of pocket increases with the number of patients you see and is generally in the tens of thousands of dollars.
 
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Dakota

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Something else to consider... if you are under claims made and the insurer folds\leaves the state you could be stuck paying a tail as well as needing to find a new insurer.
 
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Mr. Hat

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Thanks everyone, the replies were very helpful. I didn't take the gig and feel good about the decision.