LEGAL COMMITTEE
Understanding Your Professional Liability Policy Melanie Heniff, MD JD and Malia Moore, MD
H
ave you read your policy?
Most physicians have not. Please add this to your to-do list or New Year’s resolutions if you are one of the many physicians who are not familiar with your malpractice insurance coverage. It’s important to be informed about what type of policy you have, what is covered, what is not, as well as what your rights and responsibilities are as an insured physician. Ask for a copy of the Certificate of Insurance (COI), which is a summary of your policy and request a copy of the policy itself. Keep both in your files indefinitely. In most states, the statute of limitations (SOL) in which a claim can be brought is two years, however, this exists from when the injury is known or should be known. Therefore, the SOL can be extended much longer in the case of pediatric patients or when an alleged injury is discovered many years later. A typical example of a claim outside the statute would be where a lung nodule was noted on an x-ray, but the patient was not made aware, and five years later was diagnosed with a late-stage cancer. In this situation, the SOL starts when the patient first discovered the alleged malpractice, five years after the nodule was “missed,” not on the date the nodule was first noted. Do you have a “claims-made” or an “occurrence” policy? What is the difference?
A claims-made policy will only provide coverage if the policy was in effect both at the time the alleged malpractice took place and when the claim is made. Claims-made policies are the most common type of coverage and tend to be less expensive than occurrence policies, but once the policy ends, a physician will need to have “tail” or “nose” coverage for claims that are made after the policy is no longer in effect. Tail coverage can be purchased to provide coverage for claims that are made after the claimsmade policy ends (such as when a physician relocates or retires), and typically cost one and a half to three times the amount of the annual premium. Nose coverage can also be purchased from a subsequent insurer to cover claims that occur after the claims-made policy ends. Occurrence coverage policies cover alleged malpractice that occurs during the time the policy was in effect, regardless of when the claim is made. These policies are less common and more expensive than claimsmade policies but offer the advantage of long-term protection and avoid the need for tail or nose coverage. What is covered?
The amount and details of your coverage may vary depending on your policy and state laws. Typically, coverage includes attorneys’ fees, court costs, arbitration and settlement costs, medical damages, and punitive and compensatory damages. Medical malpractice insurance does not cover EMTALA or HIPAA violations, or liability arising from sexual
misconduct or criminal acts. Policies may or may not cover volunteer work or administrative roles. Often separate policies are needed to cover work outside the scope of clinical care in the emergency department such as an EMS medical director role. What are my rights and responsibilities as an insured physician?
Your policy may or may not allow you ultimate control over the decision of whether to settle a claim or proceed to trial. While you, your insurer, and your defense attorney are generally on the same team, working together toward resolution of the case, you may not always agree on settling a claim or taking the case to trial. Some policies include a clause that makes you personally liable for a jury award that exceeds a settlement offer that you rejected.
Your policy may or may not allow you ultimate control over the decision of whether to settle a claim or proceed to trial.
In terms of your responsibility as an insured physician, your policy will usually state that you are required to report any claims or potential claims against you soon after you are aware of the allegation of malpractice. Your policy will also require you to cooperate with the defense of your claim and failure to do so could lead to denial of coverage. For example, failing to work with your defense attorney or not showing up for a deposition or hearing could mean your malpractice insurer may not be obligated to provide coverage. The AAEM Legal Committee is interested in hearing from members about what legal topics you would like to see covered in Common Sense and future Scientific Assemblies. Please contact Melanie Heniff, MD JD at mheniff@comcast.net or Malia Moore, MD at mjm18@iu.edu with any input.
COMMON SENSE JANUARY/FEBRUARY 2023
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