As with many types of claims, insurance coverage plays an important role in a medical malpractice case. But what happens if a plaintiff files a lawsuit after a health care provider’s malpractice insurance policy has expired? In these cases, it is important to know if the provider has contracted additional insurance for claims made after the expiration of the policy. this is often called “tail hedging” and in this article we’ll explain how it works.
standard insurance policies for claims
To understand what additional coverage is, you must first understand what standard claims insurance policies cover when it comes to an alleged medical error that forms the basis of a medical malpractice claim.
Reading: What is tail coverage medical malpractice insurance
A claims policy protects the health care professional or facility from claims based on an incident that occurred and was reported while the policy was in force.
tail coverage
Unlike a standard policy, the additional coverage provides protection for medical malpractice claims that are reported after the provider’s policy has expired or been cancelled.
here is an example of how tail coverage works:
See also: What happens if i go to the hospital without insurance
Doctor A’s insurance policy is valid from January 1, 2010 to December 31, 2020.
Patient B alleges that Doctor A committed medical malpractice on September 1, 2020, but Patient A does not file a medical malpractice lawsuit until May 1, 2021. The case was filed on time according to the medical malpractice statute of limitations, but at this point, the doctor’s insurance policy has been cancelled. the new doctor’s insurance does not cover previous acts. Unless Doctor A has purchased additional coverage, Doctor A will not be insured for this claim.
This issue is critical not only to physician A (who may not be covered and thus may be personally liable), but is also critical to Patient B’s claim. That’s because even if Patient B’s lawsuit is successful and he or she receives significant medical malpractice damages from the court, collecting a judgment against an individual doctor is going to be much more difficult than collecting an insurance company.
A few important points regarding cola coverage: First, it only protects health care providers for acts that were committed during the original policy period, so it will not provide protection for claims for acts performed during the original policy period. tail coverage period. second, it may have a different liability limit than the aggregate claims policy had.
tail coverage cost
Additional coverage requires the policyholder to pay an additional premium. Most claims policies must give the doctor the option to purchase additional coverage to cover claims in the event the policy is cancelled. The problem, however, is that additional premium coverage can be extremely expensive, sometimes 150 or even 200 percent of the price of a mature policy with claims made, depending on medical specialty and location.
See also: How Much Is a Doctor Visit Without Insurance in 2022?- K Health
sometimes this cost can be spread over multiple payments. it can also often be written off as an unreimbursed business expense for tax purposes. the best possible scenario is that the doctor joins a group that agrees to cover (or split) the cost of tail coverage.
Are there other options besides tail coverage?
Some insurance companies offer options to doctors, such as an “extended reporting” endorsement that is less expensive than purchasing standard tail coverage.
Another option is to purchase lower liability limits or limited term coverage instead of the standard unlimited term. however, it is important to ensure that these options meet the requirements of the hospital or group practice the physician joins.
Another option instead of the tail cover is the “nose cover”. the nose cover is the cover of previous acts. is offered by the doctor’s new or subsequent insurance policy to cover acts that occurred before the new policy went into effect. it’s basically the opposite of cola insurance, but it effectively provides the same type of coverage.
again, the best case scenario would be for the new group or doctor’s office to pay for the nose cover. however, you should be aware that it is not necessarily offered to all physicians. for example, some insurance companies will not offer nose coverage to doctors who have had numerous claims against them, or who practice in a highly litigious area. Nose coverage is sometimes not offered to doctors who come from a group practice, as the doctor’s liability for prior acts could be linked to group liability, and complications can arise from joining two different insurance companies (and two different law firms) in one defense.
Learn more about how medical malpractice insurance coverage works.
See also: 20 ways to reduce the cost of your home insurance – Confused.com