The two main types of malpractice insurance for physicians including the following:
Occurrence policies may help cover incidents that happen when the insurance is active. If someone files a lawsuit a year after the policy has expired for something that occurred while the physician had occurrence coverage, the insurance will still typically cover the costs.
Claims-made policies may help cover claims made while the policy is in effect, regardless of when the incident happened. If a physician has a lawsuit filed against them after their claims-made coverage has expired, they won't have insurance for that lawsuit. To avoid this situation, the physician may be able to purchase prior acts coverage on a new policy or get coverage to extend protection for a certain period after the policy terminates.
Claims-made policies may have lower premiums, especially in the early years of a physician’s practice. However, the cost of claims-made coverage increases over time, although it's still generally less expensive than occurrence policies. Your agent can help shop around for the best combination of value and price.
Tail coverage is a policy extension for claims-made policies. It may help cover incidents that happened during the policy’s term but were filed afterward. Tail coverage may have a term of one to five years between policies, or it might be unlimited, depending on the insurer and policy terms. Tail coverage can be vital in states like Texas, where claimants have up to 10 years to file a lawsuit if they don’t discover the problem until later. Physicians should discuss tail coverage with an insurance expert to determine the best gap coverage for their situations.