Why Perform a Policy Comparison?
Each year, physicians will either obtain new medical malpractice insurance coverage or renew their current policy. Sometimes it can be an easy renewal of the current coverage when a doctor is placed with a financially stable company that provides excellent coverage and pricing. Other times, however, physicians need to evaluate their current practice and review a policy comparison so they can be sure they purchase the right coverage at the right premium for their needs.
Policy Comparison – Six Essential Items
Using the insurance quotations and policy comparison your agent provides, we recommend you review these six essential items:
- Type of Market– There are several types of insurance companies in the marketplace. A standard market is an admitted market backed by the State Guaranty Fund should the company become insolvent. However, a Surplus Lines Carrier or Risk Retention Group is non-admitted and, if the company becomes insolvent, the State Guaranty Fund will not pay for any claims. A standard market is better if coverage is feasible.
- Financial Rating – Is the Company rated by A.M. Best Company, Demotech or any other financial rating system? A.M. Best Company is the place the insurance industry looks to for financial ratings and information. The higher the financial rating, the more secure you can be in your choice of coverage. Similarly, most risk retention groups are rated by Demotech.
- Coverage Trigger – If the coverage trigger is Incident Sensitive, you can report incidents whereby you feel a claim may occur sometime in the future. If a claim does occur based on the reported incident, the insuraance company will respond to the claim. A Written Demand policy defines the coverage trigger when an actual demand for money is formally filed. An incident sensitive policy is always better, since you can rest easy that any forthcoming claim will be defended.
- Consent to Settle – A policy with a Consent to Settle Clause, not subject to the Hammer Clause is always best. Unless there is an arbitration clause written into the policy, full consent will require your absolute approval in how a claim is settled.
- Claims Expenses – Check to see if expenses are inside or outside the policy limits. If they are outside, it means claims expenses will be paid in addition to the limit of liability. If they are inside, it means claims expenses are paid within your policy limits, which can eat up any amount needed for indemnity. Outside policy limits are best since it provides additional coverage beyond your indemnity policy limits.
- Requirements – Be sure the policy limits, coverage type and, if claims made, the retroactive date all match and are what you looking for and required by your hospital affiliations.
Policy Comparison Summary
In summary, we understand how difficult it must be for you to choose the best coverage available, due to coverage needed and financial constraints in your office. We hope this blog will enlighten you so you can choose the best coverage for your practice’s needs.
Do you have any questions regarding comparing medical malpractice insurance coverages? If so, let us know below, send us an email or give us a call. We are always happy to help.