Why do I need medical malpractice insurance?
One of the primary reasons that physicians need professional liability insurance is to protect their personal assets in the event of a claim and subsequent settlement or award. Unfortunately, lawsuits against physicians — even good ones — are a fact of life today. Multimillion-dollar judgments are commonplace and threaten the livelihood of even the best doctors. Practicing “bare” — going without professional liability coverage — is like playing Russian Roulette: sooner or later, you’re going to get hit.
Don’t I get the same coverage with any insurer?
There are many different types of healthcare professional liability insurers to choose from. It is important to look closely at the types of coverage each company offers. And there are many factors other than coverage to consider when choosing a professional liability insurer. The SCPIE Companies are renowned for financial stability, effective claims handling, proactive risk management and personalized customer service. Those are just some of the reasons why we are recognized as leaders in healthcare liability insurance.
Why should I choose SCPIE?
SCPIE’s Claims Department has an impressive record of handling claims and protecting its insureds’ reputations. In California, nearly 80% of our claims are resolved with no indemnity payout, and more than 80% of court cases result in defense verdicts. SCPIE doesn’t settle frivolous lawsuits that are completely without merit simply to be rid of them. When insurers do that, the claims are resolved but the healthcare providers’ reputations may be damaged.
SCPIE’s Risk Management Department has a dedicated hotline that allows insureds to contact its risk managers 24 hours a day, 365 days a week.
The high quality of SCPIE’s personal customer service has been one of its hallmarks for more than three decades. When you call SCPIE’s offices during regular business hours, you will be greeted by a receptionist, not a frustrating automated voicemail tree.
For more reasons to choose SCPIE, see 10 Reasons SCPIE Should Be Your Medmal Carrier. (Requires Adobe Reader. For a free download, click here.)
What is a claims-made policy?
The most common type of professional liability coverage available, it provides protection for claims that occur and are reported while the policy is in effect (coverage period). Within the conditions of a claims-made policy, a claim must be reported to the carrier in writing by the insured. SCPIE was one of the first companies to offer claims-made coverage, and continues to do so because premiums are generally less costly than with other coverage types.
What is an occurrence policy?
A policyholder is covered for any event that occurs during the term of the policy, regardless of when the claim arising from the event is reported. This coverage was formerly the most prevalent professional liability insurance, but today it is generally not available due to its higher cost.
What is a claims-paid policy?
Under a claims-paid policy, premiums are based only on claims settled during the previous year and expected to be settled in the coming year. Such policies may be assessable for years, or even indefinitely, after the policy has terminated. Physicians who leave a claims-paid carrier often have difficulty obtaining nose coverage from a new carrier and may be required to purchase tail coverage from the claims-paid carrier.
What is tail coverage?
Tail coverage, which is purchased at the time a claims-made policy terminates, offers coverage for incidents that occurred while the policy was still active, but which were not actually reported until after the policy terminated.
What is nose coverage?
Nose coverage covers claims first made against the physician after the effective date of coverage on the SCPIE policy. To be covered, such claims must arise out of the physician's acts or omissions prior to the SCPIE policy's effective date and after its retroactive date. (Both dates are shown on the declarations page of the policy.) A final note: Nose coverage is also known as retroactive coverage or prior acts coverage.
Why do I need tail/nose coverage?
Such supplemental coverage is needed to protect you from liability associated with incidents that occurred before a new claims-made policy goes into effect or after it expires.
What are step increases?
Because there is a relatively small probability that a claim will be filed in the first year, premium rates begin very low.
On renewal at the end of the first year, the premium for SCPIE's policy increases "a step," since the policy then covers not only claims for incidents that occur during the second year, but also claims for incidents that occurred in the original policy year.
Premium step increases continue during the insured's first five years. The premium becomes a "mature" rate in the sixth year of coverage and then holds steady — except for general rate adjustments based on overall program loss experience and expenses.
How much coverage do I need?
To receive adequate protection, it's important to carefully select the proper coverages and limits of liability. SCPIE offers three basic policy limit options:
- $1,000,000/$3,000,000
- $2,000,000/$4,000,000
- $5,000,000/$5,000,000.
The truth is, choosing policy limits means making an educated guess—and as with most things in life, you get what you pay for. Selecting limits that are too low could jeopardize your personal assets, as well as the assets of colleagues with whom you practice. Selecting higher limits enables you to practice medicine with minimum concern about the adequacy of your protection. Decisions about limits of liability should not be based solely on price; often, substantially greater limits can be obtained for a relatively small percentage increase in premium.
A general guideline for deciding which limit to choose: Consider the risk exposure of your practice, and balance that against which limit of liability you can reasonably afford. For more on this topic, see Choosing Limits of Liability.
If I have $1,000,000/$3,000,000, how does the coverage limit apply?
The figure on the left is the maximum SCPIE will pay for a settlement or an award for a single claim; the figure on the right is the maximum SCPIE will pay for all claims in a given calendar year.
What difference does it make to have the defense costs outside the limit?
When you are insured by SCPIE, coverage of defense costs is unlimited and does not reduce the liability coverage limit—which is not the case with all insurance carriers.
