Stop the Gap: Avoid this Mistake with Medical Professional Liability Coverage

Having a gap in your medical malpractice coverage is an oversight that comes with potential repercussions.

When it comes to your medical professional liability insurance, a mistake that should be avoided is leaving a gap in coverage as it comes with potential consequences. Gaps in coverage aren't always done intentionally which is why it's important to recognize how they can happen. Here is a common scenario. 

Hidden risk of a gap in your professional liability coverage (2)

If you are currently covered under a claims-made policy, this means your carrier will provide coverage for occurrences that take place on or after your retroactive date and are first reportedduring the policy period. Your retroactive date will be listed on your declarations page and defines how far back in time a loss can occur for your policy to provide coverage. 
If you're considering cancelling or switching your claims-made policy, you'll have the option to purchase an extended reporting period or “tail coverage” from your current carrier. Tail coverage gives you protection for claims that occur on or after your retroactive date but are first reported after your insurance policy ends. 
Another option is to apply for “prior acts coverage” (also known as “nose coverage”) with your new carrier. If you purchase prior acts coverage from your new carrier, your retroactive date will remain the same as it was under your prior carrier. This new policy will provide coverage for occurrences that take place on or after the retroactive date and first reported to your new carrier. 

If neither tail nor prior acts coverage was purchased, you will have a gap in coverage exposing you to potential claims that wouldn't be covered by either your current or prior insurance carrier. In addition to the personal financial impact due to an uncovered claim, this gap in coverage may also impact your future insurability. 

To best protect yourself, no change or cancellation should be made to your existing professional liability coverage until underwriting approval with your new carrier is confirmed. 

Still have questions? We’re here to help. For more information about avoiding gaps in your medical professional liability coverage, contact MICA for a free, no-obligation consultation at 800-681-1840.

The content of this publication or presentation is intended for educational purposes only; is not an official position statement of Mutual Insurance Company of Arizona (MICA); and should not be considered or relied upon as professional, medical, or legal advice or as a substitute for your professional judgment. Consult your attorney about your individual situation and the applicable laws. The authors, presenters, and editors made a reasonable effort to ensure the accuracy of the information at the time of publication or presentation but do not warrant or guarantee accuracy, completeness, or currency of such information. As medical and legal information is constantly changing and evolving, check for updated information and consult your attorney before making decisions.

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