Regardless of the Type of Medicine You Practice, Physicians Need to Make Sure They Cover Their “Nose” and Their “Tail”
When doctors enter into employment agreements, medical malpractice insurance coverage is likely addressed. But not all insurance coverage works in the same way. You should be aware of the terminology so that you are not surprised, especially when you may want to change employers or insurance carriers.
What Does It Mean to Have “Occurrence” Coverage Versus “Claims-Made” Coverage?
Since medical malpractice claims may emerge years after a doctor last provided services to a patient, insurance companies have policies that will cover you based upon either when you provided the treatment (an occurrence policy) or when the claim is actually made (a claims-made policy). Once secured, so long as there is no interruption in coverage, an occurrence policy will apply to any malpractice claims for patients you see during the insurance coverage period, regardless of when those claims later arise. By contrast, as the name suggests, a claims-made policy applies only if there is insurance coverage when the patient brings a claim against you.
“Our firm has reviewed hundreds of physician contracts. If you need help with yours, give us a call
— ALEX GRANOVSKY
So, What Happens if I Change Employers or Insurance Carriers?
This is where things get a little more complicated—and where that “nose” and “tail” come into play. If you move from one claims-made policy to another claims-made policy, you have to make sure you are covered by either the old or the new insurance carrier. If you would like the old insurance carrier to continue to cover you for prior events, you need “tail” coverage. (You can help remember this since a tail is at the back or end of something; so, too, tail coverage will be at the end of your old claims-made policy). Suppose, instead, that you prefer to secure coverage with your new carrier for any new claims that might be made in the future—in this case you need to secure “nose” coverage. (You can remember this either by thinking of a nose protruding forward for all claims, regardless of when they occurred, or just because “new” carrier and “nose” begin with the letter “n.”)
Why Should I Be Concerned About the End of an Employment Relationship that I Am Just Starting?
The answer, as with many things is money. You need to be aware of the terms of your employment contract to see if it specifies both the type of insurance the employer may be securing for you (occurrence or claims-made) as well as whether you or your employer will be responsible for paying for tail coverage (with the old carrier) should you leave a practice that provided claims-made coverage. If the agreement does not specify and the employer provided claims-made coverage, you could, in the future, find yourself responsible for the expense of tail coverage (with the old carrier) or nose coverage (with a new insurance carrier).
There are a number of other issues with medical malpractice insurance coverage that should be considered in an employment agreement. If you would like to discuss your situation with us, please feel free to call or email us at any time. You will be on the phone with an attorney within 24 hours.
Or Click here to learn more about our physician services.