Types of Malpractice Coverage
There are two different forms of malpractice insurance available to health care providers – “occurrence” and “claims-made.” While an occurrence policy covers any incident during the life of the policy, even if the suit is filed long after the policy has expired, a claims-made policy covers only lawsuits brought while the policy is in force. In this case, a supplemental policy is necessary to provide protection when a suit is filed later.
The occurrence form has been used for several decades to provide medical professional liability insurance. The occurrence form covers incidents that happen within the coverage territory during the policy period without regard to when the claims are reported. Occurrence coverage provides protection for each policy period indefinitely. Because of past upheaval and a need for rate consistency in the malpractice insurance market, more and more insurance providers are offering a claims-made form, rather than occurrence coverage.
The claims-made form was introduced during the mid-1970s as an alternative form of coverage. Under a claims-made form, a medical incident must have happened and be reported to the insurance company while the policy is in force. A “Claims-made” policy covers a claim for a medical incident first made against you during the policy period within the coverage territory. Once the policy has been terminated, coverage no longer exists. If coverage is desired for claims reported after the policy has been terminated, then an Extended Reporting Endorsement (known as a “tail”) must be purchased.