MEDMAL 101

Defense Costs:

"Outside" means defense costs do not reduce liability limits. "Inside" means they are included within the liability limit. For example, a $1 million per occurrence policy with $100,000 defense costs leaves $1 million for the claim.​

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Incident Reporting:

Under a claims-made policy, incidents must happen and be reported while the policy is active. Physicians can report potential claims, like an upset patient after an unfavorable outcome.

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Consent to Settle:

This clause requires the insurer to get your permission before settling. A "hammer clause" means rejecting a settlement could make you responsible for excess costs.

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Exclusions:

Policies exclude certain activities, like serving as a medical director.

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Limits of Liability:

Defines the maximum amount the insurer will pay, e.g., "$1 million/$3 million" means $1 million per claim, $3 million annually.

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Tail Coverage:

Extends the time to report claims after a policy ends. It converts claims-made policies to occurrence policies, allowing coverage for past incidents.​

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Free Tail Coverage:

Some insurers offer free tail coverage for physicians over 55 retiring after five years of coverage.​​

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Admitted vs. Non-Admitted Carriers:

Admitted carriers are state-regulated and backed by guarantee funds, while non-admitted carriers handle higher-risk practitioners but aren’t state-backed.

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Premium Discrepancies:

Premiums vary by location and specialty. Low premiums from newer carriers may lead to higher renewal costs.

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A.M. Best Ratings:

Shows the insurer’s financial health; "A-" or better is preferred.

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Claims:

Incident reporting allows claims to be filed for reported incidents under active policies.

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Causation & Damages:

Proving malpractice requires causation and can result in economic (e.g., lost earnings) or non-economic (e.g., pain and suffering) damages.

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Policy Types:

Claims-made policies cover incidents reported during the policy period; occurrence policies cover incidents regardless of when claims are reported.

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Obtaining Coverage:

The application process requires details like a medical license, loss history, and policy details. Providing accurate information ensures appropriate coverage.

 

Miscellaneous:

Insurers must report malpractice settlements to the National Practitioner Data Bank (NPDB). An expert witness may testify if medical standards are questioned.