Many new physicians may feel relieved when offered a contract that includes malpractice coverage by the hospital. However, unfortunately, things are not the same when switching to another practice opportunity after a few years!
It is where tail malpractice coverage comes in. When switching your practice, it offers a backup plan in case any patient brings up a claim from your previous practice.
Even if you still think you do not need one, here are some scenarios where you may be required to, or it will be a good idea to have one:
Quitting Private Practice for a Job in a Hospital
Hospitals frequently demand doctors buy tail malpractice coverage in case a claims-made policy or other medical malpractice insurance covered them before they began working for the hospital.
However, most hospitals will pay for the expense of tail malpractice insurance or permit the doctor to keep their present coverage, in which case tail malpractice insurance is not required. Furthermore, the hospital might be eager to offer past action coverage under its insurance plan. Overall, It is a good idea to thoroughly discuss your contract to know what you will be covered for.
Leaving the Hospital for Independent Practice
Physicians may be required to obtain tail malpractice insurance when they switch from one group practice to another, a solo practice, or another group practice. Frequently, this stipulation is included in the group practice employment contract.
It may be possible to stipulate that the new practice will be responsible for paying for the departing physician’s malpractice insurance before they sign an employment contract. The new practice setting insurance for the departing doctor may include prior actions coverage for the old policy, which may fulfill the obligation to have malpractice insurance.
Relocating to a State Where the Existing Insurer Does Not Give Coverage
Not all insurers provide coverage in all states and locations. There is no assurance that a physician who relocates can keep their present medical malpractice insurance provider.
Medical malpractice insurance premiums can go up or down depending on where you live. Before relocating, doctors should check with their insurance provider to see if they may keep their present coverage and if there will be any changes to their premiums or coverage.
Getting tail malpractice insurance won’t likely be essential if the current policy can be maintained. If the current one does not, finding a new insurer that covers the doctor in both his or her new and old states may be an option. In this situation, it should be possible for the new insurer to offer past action coverage for the doctor’s previous state, negating the need for tail malpractice insurance.
Leaving the Medical Profession
The good news is that many medical malpractice insurance providers give retiring doctors free tail coverage against malpractice. Yet depending on the doctor’s age and the length of time their current insurance provider has covered them, the insurer might impose limitations.
Doctors considering retirement should discuss their plans with their insurance provider to ensure they are adequately insured. Nobody wants to spend their golden years worrying about pending malpractice lawsuits!
Practicing is quite fascinating, and every physician has a unique experience. However, having a malpractice insurance while working for a practice and a “tail” insurance after leaving that practice are two separate coverages that every physician should consider to protect one from any reputational and financial issues in the nick of time.
Naomi Olson [Website • Twitter • Headshot]
I have a severe phobia of bridges and dirty balance sheets.
Hobbies: blogging, meditation, and loving Bull Market (my dog)