What is a claims-made policy?
A claims-made policy is a common type of medical professional liability insurance for physicians, advanced healthcare professionals and medical practices. It provides coverage for medical malpractice claims that are reported during an active policy period and occur after a policy’s retroactive date.
What exactly is a retroactive date on a claims-made policy?
A retroactive date is the date an active policy will start to cover reported claims. The retroactive date is usually the same as the effective date but if you have had claims-made coverage in the past it may go back to the start date of your original claims made policy.
For example, if you have a claims-made policy that has an effective date of June 1, 2023, and a retroactive date of February 10, 2019, your policy would cover claims that are reported after June 1, 2023 for losses that occurred after February 10, 2019 - since the claim was reported during the policy period and occurred after the retroactive date.
What happens if you decide to cancel your claims-made policy or want to switch insurance companies?
There are two options that offer additional protection to physicians and health care professionals:
- Tail coverage – A tail endorsement, or extended reporting period, is added to a canceled or expired policy to extend protections from claims that occurred after the retroactive date of the policy but were unknown at the time of cancellation.
- Prior acts coverage – Also called nose coverage, is used when you are canceling your current claims-made policy and applying for another claims-made policy with a different carrier. If approved, your new carrier will issue your new policy with the same retroactive date of your expiring policy. You can now report any new claims for occurrences that took place on or after your retroactive date to your new carrier. Securing prior acts coverage from your new carrier will eliminate the need to purchase tail coverage on your expiring policy.
What to consider when purchasing a claims-made policy?
It’s important to note that not all malpractice policies are created equal, and understanding the details of different options can help you evaluate them more effectively. Here are a few things to consider:
Understand the details of your insurance policy. Make sure you ask questions to ensure proper coverage. What are your policy limits? Does it cover you individually? Or if you have a group or LLC, is it covered under the same policy? In what states does coverage apply? Consent clause to settlement? Coverage to reimburse lost wages when in trial?
The reputation of the carrier. Ideally, you want to select an insurance carrier with a long-standing reputation for putting the best interests of their policyholders first and foremost. Choose an independently owned, physician-founded, and directed insurance provider that understands the needs of physicians and other medical professionals.
Carrier ownership. You can choose to purchase coverage from either a stock insurance company or a mutual insurance company. A stock company is owned and beholden to the shareholders. A mutual insurance company is owned by the policyholders and tend to be more policyholder-focused and may offer additional incentives.
Financial strength. Consider a carrier’s A. M. Best rating, which gives you an independent, third-party evaluation of its financial strength and ultimate ability to fulfill its financial obligation to you in the event of a claim.
If you join a group and are not in control of purchasing your own policy, make sure you understand your employment contract. Ask the type of policy they provide and who is paying for the insurance. You will also want to know if it can move with you if you switch employers, and if its claims-made policy, who is responsible for paying tail coverage.
Request a copy of your insurance and keep records of your insurance documents so you can access them in the event of a claim or future needs.
Does MICA offer claims-made coverage?
Yes, we do! MICA offers medical professional liability claims-made coverage in Arizona, Utah, Nevada, and Colorado. We have continually served independent physicians and practices for over 47 years.
MICA's reputation and dedication to high touch service has remained consistent over the years. When the unexcepted occurs, our experienced claims professionals will be in your corner to support and defend you every step of the way.
Our trusted medical malpractice protection covers you for medical professional liability, peer review, defense costs, supplementary payments, and discretionary medical payments. MICA has received 93% of verdicts favoring the defense over the last 5 years.
To learn more, request a quote today.