Is E&O insurance sold as occurrence based or as claims-made policy? Why does my agent say that I can't get an occurrence based coverage? I am a physician, practicing in CA.
Total Comments: 2
Posted: Mon Jan 21, 2013 12:40 pm Post Subject:
Most E&O insurance policies are sold as claims-made policies. This means that the coverage will stay in force for the policy term only and will not pay after the policy is terminated, cancelled or discontinued. It won’t pay for prior acts or occurrences. Doctors and lawyers are specifically not allowed liability coverage on occurrence basis.
Posted: Mon Jan 21, 2013 04:05 pm Post Subject:
Doctors and lawyers are specifically not allowed liability coverage on occurrence basis.
This is not entirely accurate. While "occurrence" based policies are harder to find, they are not prohibited, and with most professional liability policies written on a "claims-made" basis, it is possible to obtain, and most physicians purchase, a policy with a "tail" option that can be as long as 20 years -- providing protection for a claim made today for which the physician became liable many year earlier. Obviously, the longer the tail, the more expensive the coverage.
Additionally, and an important reason to stay with the same insurer year after year, there is a "retroactive" provision found in almost every claims made liability policy. A claim made this year for something that occurred several years ago if that date is within the retroactive period will be covered -- and this protection can go back as far as to the first year the physician was insured with his/her present MPL carrier.
Posted: Mon Jan 21, 2013 12:40 pm Post Subject:
Most E&O insurance policies are sold as claims-made policies. This means that the coverage will stay in force for the policy term only and will not pay after the policy is terminated, cancelled or discontinued. It won’t pay for prior acts or occurrences. Doctors and lawyers are specifically not allowed liability coverage on occurrence basis.
Posted: Mon Jan 21, 2013 04:05 pm Post Subject:
Doctors and lawyers are specifically not allowed liability coverage on occurrence basis.
This is not entirely accurate. While "occurrence" based policies are harder to find, they are not prohibited, and with most professional liability policies written on a "claims-made" basis, it is possible to obtain, and most physicians purchase, a policy with a "tail" option that can be as long as 20 years -- providing protection for a claim made today for which the physician became liable many year earlier. Obviously, the longer the tail, the more expensive the coverage.
Additionally, and an important reason to stay with the same insurer year after year, there is a "retroactive" provision found in almost every claims made liability policy. A claim made this year for something that occurred several years ago if that date is within the retroactive period will be covered -- and this protection can go back as far as to the first year the physician was insured with his/her present MPL carrier.
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