Made Policies. If any insurance policy is written on a claims-made form, the following conditions apply: 1) the retroactive date must be shown and must be before the date of this AGREEMENT, 2) the insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work, and 3) if coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the effective date of this AGREEMENT, CONTRACTOR must purchase an extended period coverage for a minimum of five (5) years after completion of contract work.
Made Policies. These policies cover acts of malpractice when the claim is reported during that policy year, even if the malpractice occurred years before. This is an important distinction. If the physician is covered by an occurrence policy, he or she is covered for malpractice that occurred during the policy year, even if the malpractice does not manifest itself for years after the policy expires. Under the more prevalent claims-made policy, if the malpractice occurs in 2006 but no claim is made until 2008, the policy that was in effect in 2006 would not provide coverage. A physician under a claims-made policy who terminated employment at the end of 2006 would need to carry insurance to cover those claims that may arise from malpractice that occurred during 2006 but does not result in a claim until years later. Tail Policy Coverage The most common situation I encounter in negotiating employment agreements is whether the employer or the employee is responsible for purchasing the tail coverage for the professional liability coverage after termination of employment. A tail policy covers any lawsuit filed after termination of employment that relates to activities per- formed by the physician while an employee of the med- ical practice. Many years ago, most professional liability policies were occurrence policies. As a result, there was no need to buy tail coverage because the typical policy provided insurance protection for any claim made for acts that occurred while the physician was an employee, even if the claim did not arise until after termination of employment. Thus, if you are fortunate enough to be covered by an occurrence policy, the cost of professional liability insurance after employment is a nonissue. Unfortunately, most insurance policies today are claims- made policies, and it is that type of policy that most of my clients must deal with on a day-to-day basis. The general rule has been that medical groups will pay for the professional liability coverage during the period the physician is employed. Once the physician termi- nates employment, however, most medical groups place the burden of purchasing the tail coverage policy on the terminating employee. One exception to this rule may occur if the particular medical specialty has a reasonable professional tail coverage cost. When I represent medical groups, I always recommend that the medical group not pay for the tail coverage. When I represent the individual physician, I attempt to carve out situations in whi...
Made Policies. These policies cover acts of malpractice when the claim is reported during that policy year, even if the mal- practice occurred years before. This is an important dis- tinction. If the physician is covered by an occurrence poli- cy, he or she is covered for malpractice that occurred during the policy year, even if the malpractice does not • Occurrence Policies: Cover acts of malpractice that occurred during the policy year, regardless of when the patient or physician is first notified of the alleged mal- practice.
Made Policies. These policies cover acts of malpractice when the claim is reported during that policy year, even if the malpractice occurred years before. This is an important distinction. If the physician is covered by an occurrence policy, he or she is covered for malpractice that occurred during the policy year, even if the malpractice does not manifest itself for years after the policy expires. Under the more prevalent claims-made policy, if the malpractice occurs in 2006, but no claim is made until 2008, the policy that was in effect in 2006 would not provide coverage. A physician under a claims-made policy who terminated employment at the end of 2006 would need to carry insurance to cover those claims that may arise from malpractice that occurred during 2006, but that does not result in a claim until years later.
