Types of medical malpractice insurance

One of the first elements lawyers consider in a malpractice case is the type of insurance the accused medical professional has and the liability coverage limits of the specific policy. Different types of insurance and liability limits warrant different case strategies.

If you are considering filing a medical malpractice claim, it may be helpful to learn more about malpractice insurance and how it may affect your case. There are two primary types of medical malpractice coverage: claims and incident coverage.

Claims-made medical malpractice coverage

Similar to home or car insurance, claims-made insurance covers malpractice that occurs during the policy term. However, unlike traditional home or auto insurance, a claim must also be reported to the insurance company during the active policy period to be covered.

If a claims-based malpractice policy is transferred to a new carrier or canceled for any reason without provisions to extend coverage beyond the period of cover, no benefits will be paid, even if the act of malpractice occurred while the policy was in effect . Instead, a medical provider may be held personally liable for costs associated with your claim, with no limit of liability.

Your attorney knows how to research the insurance coverage of the accused medical provider in your claim to determine exactly how coverage — or lack of coverage — might affect your case.

Medical Malpractice Policy

An incident policy will insure any incident that occurs while the policy is in effect, regardless of when a claim is made, even if the policy has been canceled since the malpractice occurred. Incident policies take into account current and future claims of malpractice, although the limits of liability are those in effect when the incident occurred.

With contingency insurance, your medical malpractice attorney will know what the liability limits will be in your case when entering the lawsuit and will plan your case strategy accordingly.

How does malpractice coverage work?

Suppose an incident of malpractice occurred on July 1, 2004. On 1 July 2005, the attending physician became aware of a possible claim and informed the insurer thereof. A medical malpractice claim was filed on July 1, 2006.

  • An incident policy effective July 1, 2004 would cover the claim regardless of when the actual lawsuit was filed or reported to the insurance company.
  • A policy effective July 1, 2006 would cover the claim, as long as the retroactive date is no later than July 1, 2004.
  • A claims-made policy effective July 1, 2004, but terminated July 1, 2005 would reject the claim because the active period of cover ended before the claim was reported to the insurance company. If the physician did not purchase “tail” coverage to expand the provisions of his 2004 malpractice insurance policy, the physician may be held personally liable for the costs associated with this malpractice claim.