A Guide to Locum Tenens Malpractice Insurance
Protecting your professional reputation and finances is always a primary concern. For physicians and clinicians working locum tenens jobs, malpractice insurance is often provided. Even so, achieving a full understanding of how locum tenens insurance works can only contribute to your continued career success.
Locum Tenens Malpractice Insurance: The Basics
A locum tenens malpractice policy provides coverage to the physician for damages suffered by a patient resulting from professional healthcare service. Policies generally contain very specific definitions for limitations or exclusions of coverage. It’s important to make sure you fully understand any and all of a given policy’s exclusions before signing a contract.
Malpractice insurance policies generally last 12 months, although some carriers offer six-month policies. All policies have limits of liability — the maximum amount an insurer will pay for damages. The limits are generally offered on a per-claim (or per-occurrence) and annual aggregate basis. For example, if you have a $1 million/$3 million coverage policy, the insurer agrees to pay up to $1 million per claim, with a maximum of $3 million for the year. Most policies do not have a deductible, but larger physician groups often consider policies with a deductible provision because of the cost benefits.
Locum Tenens Malpractice Insurance: Types of Policies
There are two chief forms of medical liability insurance:
Claims-Made Policy. Claims-made policies cover a physician for incidents that occur after the retroactive date of a policy and are reported while that policy is in force. With claims-made policies, it is common to purchase an extended reporting endorsement, or a “tail,” on top of the original contract. Essentially, the tail is an extended coverage period purchased to ensure adequate coverage in the event of retirement, termination, disability, or death. The tail offers coverage in the event that a claim is made after the termination of the initial policy for an event that occurred while the policy was in effect.
Tails can be purchased in a wide range of time lengths, from unlimited to a year past the expiration of the policy. Tails can also be very expensive (often ranging from 100% to 200% of the premium), depending on the length. An option frequently used by locum tenens companies with claims made policies is for any new policy to carry a retroactive date back to the company inception date resulting in an extended reporting period for prior exposure. This effectively negates the need for a tail for a locums physician.
It is possible that coverage limits and conditions during the tail period may differ from those of the original insurance contract, but these terms are almost always regulated by the insurance provider with little room for negotiation. Some insurance carriers also offer free tails to physicians who have been individually insured with the same company for longer periods of time (generally five or more years).
Occurrence Policy. Occurrence malpractice policies cover a physician for incidents that occur while the policy is in effect, regardless of when those incidents become a claim. This type of policy is common in academic settings, particularly if you are a resident.
With an occurrence policy, it is important to remember that the coverage limit stays the same throughout the life of the policy, and it is your responsibility to make sure this amount is adequate before signing a contract. Also, the policy will only remain in effect while the carrier is in business; should the insurance company go out of business, the policy is no longer active. Because of the nature of this policy, they generally cost more upfront but don’t have the same additional expenses associated with claims-made policies.
Many physicians also choose to purchase an umbrella policy. These policies provide coverage on top of the physician’s primary policy for additional protection against high-value claims. Some umbrella policies have terms and conditions very similar to those of the primary policy and some may not. Be sure that you understand all the terms and conditions of your umbrella policy before signing a contract to ascertain whether it will provide you with the type of coverage you need.
AMN Healthcare secures superior malpractice insurance at no cost to the physician through an A-rated company, providing a minimum $1 million per loss event and $6 million per physician policy aggregate with continuous coverage.
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This article does not constitute official financial, insurance, or legal advice on the part of AMN Healthcare.
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