Below are the most common questions we hear from our Clients – to view the answers simply click on the question. If you need additional support, please click here to contact us today or call 1-800-724-2627.
What is Medical Malpractice?
Medical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error. Standards and regulations for medical malpractice vary by country and jurisdiction within countries. Medical professionals may obtain professional liability insurances
to offset the risk and costs of lawsuits based on medical malpractice.
What is the difference between Claims Made and Occurrence Policies?
Under the Occurrence Form, the claim is triggered based upon the INCIDENT/OCCURRENCE date. Two (2) things must be true in order to trigger a claim:
1. The Incident/Occurrence must have occurred during the time in which the Insured had or has a policy in force; and
2. The Claim is not excluded from or otherwise inelegible for coverage due to the terms of the policy.
Note: Because of #1 above, no Extended Reporting Period is necessary.Under the Claims Made Form, the claim is triggered based upon the date in which the claim is REPORTED. Three (3) things have to be true in order to trigger a claim:
k1. The Claims is first made/reported during the policy period;
2. The Claim results from an Incident that takes place after the Retroactive Date and before the Policy Expiration Date; and
3. The Claim is not excluded from or otherwise inelegible for coverage due to the terms of the policy.
What is a Risk Retention Group?
During the past several years, the insurance markets offering medical malpractice liability insurance to physicians and surgeons in New York have shrunk dramatically in spite of the highest malpractice rates in the United States. There are few admitted insurers willing to write medical malpractice liability insurance in New York and as a result, medical malpractice liability insurance is no longer affordable, litigation continues to grow, and the situation is bordering on a crisis. One solution to averting this crisis is for physicians and surgeons to take control of their destiny by creating a physician-owned insurance company in the form of a Risk Retention Group. A Risk Retention Group is a stock insurance company owned by its members created under a federal statute called the Liability Risk Retention Act of 1981, and amended in 1986. Most Risk Retention Groups are incorporated under the laws of the state they are domiciled in and register with the state they choose to write business. Because they are federally mandated, they preempt the state laws where they choose to operate.
Do you provide coverage for PA's, NP's, CRNA's and other ancillary health care providers?
If you have ancillary health care providers working for you, especially advanced practice nurses, you need to make sure they have appropriate coverage in place, whether it be on your medical professional liability policy or their own individual policy. Not only is it important for them in the event they are named in a law suit, but the supervising physician or surgeon and /or the employing corporation has a vicarious liability exposure that needs to be addressed as well. Whether a W2 employee or a 1099 Independent Contractor can make a difference in the manner in which a company will provide coverage. Please check with your current and/ or prospective medical liability insurance carrier to find out what information you need to provide in order for them to properly insure your exposure.
In New York State what would be considered an admitted carrier?
Admitted carriers in NYS have one distinct benefit. If one of the admitted carriers fail or become insolvent for any reason, the doctor should have access to New York State’s Guaranty Fund. The Fund has been established to provide coverage for doctors only if they are insured through one of the admitted carriers and it fails. The Fund also covers other forms of insurance (i.e. life insurance). It is maintained by the state and is subsidized by taxes / fees levied against medical professional liability insurance companies of all types that operate in NY.It is important to keep in mind that the New York State Guaranty Fund does not cover the entirety of a doctor’s limits. In other words, if a doctor has coverage with one of the admitted carriers and a malpractice claim is made causing it to go insolvent, the Fund will then step in. The doctor may have had $1mil/$3mil limits of liability in NY through their medical malpractice insurance policy, yet the Guaranty Fund will only cover a portion of the original limits. Defense costs are typically not covered.When you purchase your coverage through an Admitted carrier, you may also get access to the Section 18 free excess layer of $1mil. In order to be eligible for the free excess layer of insurance,
you need to purchase a limit of Liability of $1.3mil/$3.9mil from an admitted carrier, have admitting privileges at a hospital, and complete a risk management course.
Do Risk Retention Groups have access to the Guarantee Fund or Section 18 free Excess Layer of Insurance in New York State?
No because they are not Admitted Carriers. However, most Risk Retention Groups can provide higher limits of liability to make up for the free excess layer of insurance and they purchase Reinsurance to protect themselves against the risk of insolvency. The admitted insurance carriers rely on New York State to back them up and do not purchase Reinsurance.
Who are the Admitted Carriers in New York?
There are 4 Admitted Carriers in the State of New York:
• PRI (Physicians’ Reciprocal Insurers)
• MLMIC (Medical Liability Mutual Insurance Company)
• Academic Insurance Company
What is insolvency?
An insurance company is declared to be insolvent when it no longer meets the statutory definition of solvency. Even though the company may still have assets, the company is deemed to be “Unable to pay its outstanding lawful obligations as they mature in the regular course of business …” and the existing assets of the company are then preserved to allow for the settlement of outstanding claims and debts to creditors.
What is 'Section 18 Free Excess Layer of Insurance'?
By 1985, New York State faced a second crisis. Rate levels had begun to increase by more than 15% each year since 1974 and were more than five times greater than just 10 years earlier. Physicians were also concerned that the policies they were purchasing, although covering up to $1 million per claim with an aggregate claim limit of $3 million per year were still insufficient with the increasing number of multi-million dollar verdicts and settlements. In 1985 most actuaries believed that many medical malpractice insurers were either insolvent or on the brink of insolvency. After several years of double-digit premium increases and physician concerns that coverage was insufficient, the State established the physician excess liability program, which provides an additional $1 million per claim and $3 million aggregate layer of malpractice coverage for qualifying physicians.
Doctors, surgeons and dentists have been able to take advantage of a section of NYS Legislation passed in 1986 called the Medical Malpractice Reform Act. This allows you to obtain an additional $1 million per incident / $3 million aggregate coverage for medical malpractice insurance. To qualify, you must carry underlying limits of $1.3 million per incident with a $3.9 million aggregate limit per policy year.
Who can qualify for Section 18 Insurance?
In order to qualify for the NYS Excess Liability program (Section 18), you must have:
• an affiliation with a New York state general hospital
• a qualifying individual primary policy of $1.3 million per claim / $3.9 million aggregate
• completed a qualified risk management program within the last two years
• applied through only one hospital
• applied through only one carrier
• filed a complete application on time
What is a Consent to settle clause?
Ideally, the final decision to settle a claim rests with the insured with no penalty assessed.
What Triggers a Claim?
On a claims made policy, a report of an incident should trigger coverage even if no claim or demand has been made. Some carriers are incident sensitive and and others require a written demand.
What is an Extended Reporting Endorsement (Tail) Provisions?
A claims-made policy should include the right to purchase tail, at a known cost, when certain conditions are met, as well as the provisions for a free reporting endorsement in the event of death, disability or complete retirement from medicine.
What is Nose Coverage?
Prior acts coverage Malpractice insurance is a supplement to a claims-made malpractice insurance policy that may be purchased from a new carrier when a physician changes carriers and had claims-made coverage with a previous carrier; nose coverage covers incidents that occurred before the beginning of the new insurance relationship but for which no claim has been made.
Are administrative actions covered?
Most policies includes defense for administrative actions brought by the Office of Medical Professional Conduct on a sub-limited basis ranging from $25,000 to $100,000 annual aggregate limit. The availability of the sub limit amount is subject to underwriting review.
Do I get to choose my defense counsel?
Most insurance companies have the right to select the defense counsel on behalf of its insureds; however, the insured may request a particular law firm to be reviewed by the insurance company for suitability to defend the claim.
If I purchase my coverage through a Risk Retention Group, will I get my capital back in the event I cancel the policy?
Most Risk Retention Groups have the option to purchase the shares back of a cancelling insured, subject to the financial stability of the RRG and approval of the Board of Directors at the time of cancellation. The value of the shares will be based upon the book value at the time in which the policy is cancelled.
Will my PC be covered at no additional cost?
Yes, the corporation and employees (other than physicians/surgeons and physicians extenders) can share in the Scheduled Physician’s/Surgeon’s limits at no additional cost.
Can I get separate limits for my PC or LLP, if so is there additional premium cost?
Separate limits are available for a physician’s PC, LLC, PLLC or LLP, sometimes
there is an additional charge is based the physician’s/surgeon’s premium.