What should I look for when comparing policies from different insurers?
We recommend that you examine several coverage conditions in the policies:
What is an Extended Reporting Period or “TAIL”?
An Extended Reporting Period or “TAIL” is an endorsement that is generally made available to an insured on a Claims-made policy if the insured elects to end the policy for any reason. This endorsement continues coverage for any late reported claims that arise after the policy has ended. It generally costs anywhere from 100% to 200% of the expiring premium to buy this endorsement depending on the length of coverage being purchased. One year of extended time to report might cost 100% while an unlimited ERP generally costs 200% if available. This endorsement generally must be ordered and paid for within 30 days of the conclusion of the policy.
What is a Retroactive Date and why is it important?
When a liability policy contains a “retroactive date” or “retro date” that means that the policy is issued on a claims made form. Under a claims-made policy, this coverage provides insurance for claims arising from incidents that occurred while a previous claims-made policy or policies were in effect, but that were not reported until that policy (or the last in a succession of policies) was terminated. With retroactive coverage, the new policy covers such claims. With such coverage, purchase of tail coverage from the previous carrier is not necessary.
What is a hammer clause?
A provision included by insurers in some consent-to-settlement clauses to encourage the insured to accept a recommended settlement offer. It provides that if the insured refuses a settlement offer recommend by the insurer, the insurer’s liability is limited to the amount of the recommended settlement offer. Example: The insurer recommends a settlement offer of $50,000. The insured refuses the offer, and the claim results in a judgment of $100,000 against the insured. The insurer will only pay $50,000, less any deductible. The insured is responsible for $50,000, plus any deductible amount
What is the purpose of an Arbitration Agreement?
Some malpractice policies require that the insured secure a signed agreement with each patient to agree to binding arbitration rather than a jury trial in the event of a medical incident leading to patient dissatisfaction. The general purpose of arbitration is to find a middle ground between two opposing positions. While this may work to a provider’s advantage if the standard of care was not met, it might well result in a settlement by a provider who did meet the standard of care.
What are the typical policy provisions regarding DDR (Death, Disability, or Retirement) of the Insured?
The typical policy provisions for the granting of a free “TAIL” to an insured are: Age 55 or older and 5 full years of coverage with that insurer. Many policies have no DDR provision and a rare few only require one year insured with the company. When looking at this provision, take note whether the extended reporting period is unlimited or for a specific number of years.
Why does a claims made policy increase in cost over three or four years?
A claims made policy for a new to practice doctor has a lower initial cost since there are no prior acts to insure. Therefore in year one there is only the exposure for the current year. In year two the exposure doubles and generally so does the premium. In year three the exposure is for three years and the rate goes up another 10% or so. And it finally matures in year four and remains steady from there on. The cost of the “tail” from then on would be roughly 200% of the final premium.
What if I have a claims made policy and want to switch insurance companies?
You have two choices in this case. In order to have no lapse in coverage you need to have the new insurer pick up your prior acts retroactive date, or you must buy tail from the expiring policy and start over with the new insurer. The prior acts date or Retroactive Date is the first date that the initial policy provided coverage from and is generally found on the policy declarations page.
What are different kinds of malpractice insurance policy forms?
There are three different policy forms that are generally used: Claims-made, Occurrence, and convertible claims made. The most commonly used form for medical professional liability is the claims made policy. They often cost less up front but require the purchase of an Extended Reporting Period or “tail” if you wish to cancel them. Occurrence policies, if available, are often slightly more expensive but do not require that you purchase a “tail”. A convertible claims-made policy is sort of the best of both worlds. It is less expensive up front and is convertible to occurrence which eliminates the need to ever buy “tail” in the future.
How does the Convertible claims made policy work?
If an insured is currently on a claims-made policy we can issue a Convertible claims made policy picking up all prior acts so that there is no gap in coverage. At any renewal after the first year we can convert the coverage to an occurrence form and eliminate future “TAIL” obligations.
What if I am a recent graduate or a first time buyer? What coverage should I buy?
If an Occurrence Form policy is available to a first time buyer it is probably the best choice. The reason is that if that buyer gets a claims made form and then elects to cease coverage for any reason (i.e. Pregnancy, Sabbatical leave, leaving private practice to teach, etc.) they will be faced with buying a “TAIL” at additional expense. If the buyer elects to start on an Occurrence form and the same scenario takes place, the buyer notifies the company of intent to leave practice and any unearned premium for that year is returned and no “TAIL” is required.
How does the Capitol policy differ from competing companies?
The real difference between insurance policies comes down to exclusions. Doctors get little to no education in business or malpractice when they are in medical school. Once they graduate they tend to look at the price rather than the product because they haven’t had the experience to evaluate the different coverages. We designed this program to be flexible enough to fit the way that you practice and we take the time to explain the different coverage options to you. Our policies cover your course and scope of practice. We only exclude coverage for midwifery, obstetrics and major surgery. Because every Naturopath chooses how they wish to practice we built this program to be flexible yet easy to respond to your changing needs.
What if I have a blended practice with mid-levels or a Chiropractor or an Allopath?
The Capitol policy form is written for a Naturopathic medicine practice. We are seeing more blended practices sprouting up as a result of the Affordable Care Act. We think blended medicine makes a lot of sense. Being able to treat the cause as well as the symptom saves money and provides better health. To that end we can offer coverage to Acupuncturists, mid-levels or Chiropractors where it makes sense to do so. We can also provide separate coverage that integrates well with our program. It all depends on your course and scope of practice. We will help you decide what coverage will best work for you and your practice.
What if I have to appear before the Board?
Capitol has a separate sublimit built into the policy to provide legal representation for you at a Board hearing. Never attend a Board action without representation!
What kind of discounts are available?
We have credits available for years of practice experience, claim free discounts, and part time discounts. In addition we offer a 10% discount to current members of their state associations. Recent graduates and new to practice providers are eligible for a discount if they purchase the Occurrence form policy, subject to our policy minimum premiums.
Why the discount for State Association membership?
When we set out to build this product three years ago we held a meeting with the directors of the state associations from Arizona, California, Oregon and Washington along with several of their physician board members. We asked what they liked and disliked about the coverage offerings available at the time and said “If we could build a program from the ground up for you what would it look like?” The associations are passionate about providing value to their members and do the lobbying to expand your scope of practice, provide educational resources, and help you succeed. We agree strongly with those values and in an effort to help promote membership we decided to offer a 10% premium credit to members. In many cases the discount pays for or comes close to paying for the membership and to us that makes for a great partnership!
What is your application process like?
With almost 40 years of experience writing coverage for Doctors we know how much they hate malpractice applications, both new and renewal. Most of the competing companies that write coverage for Naturopaths use a modified Allopathic or Chiropractic physician application. Much of what is asked is immaterial to Naturopathic medicine and therefore confusing. We have chosen to use a simple two page initial application and a one page renewal application. Your time is valuable, as is ours. We want to know if or how your practice changes from year to year so we can accurately determine your premium. Keeping it simple works for both of us.
How long will it take to get a quote?
Our goal is to be able to provide a timely quote to you, often within 24 hours. Upon receipt of a complete application we have in house underwriting authority, binding authority, and policy issuance authority. We have, in an emergency, provided a quote and bound coverage in under an hour.