This is the second in a two-part series on medical practice. Read part one: The risk and cost of a medical malpractice lawsuit
As with patients who may not want to hear or follow advice about health risks, just ignoring the reality of medical malpractice won’t make it go away. The longer you’re in medicine, the more likely it is that you’ll be named in a malpractice lawsuit. But just having medical malpractice insurance isn’t enough; it’s important understand how your coverage works as well as the details of the medical malpractice process. This overview will help you gain a better understanding of the coverage and process, with a focus on malpractice for physicians working locum tenens or considering locums as a career path.
Understanding the coverage
Your locum tenens agency may or may not purchase professional liability insurance for you. Weatherby has decades of experience in dealing with professional liability insurance matters and works with a top-tier insurance broker and highly rated national carrier to procure professional liability insurance on your behalf. Even though you may not be shopping for coverage, or purchasing it yourself, there are two main types of coverage you should know about as a locums doctor.
An occurrence policy protects you from covered incidents that arise out of acts or omissions occurring during the policy period, regardless of when a claim is filed. As long as the adverse event happened during the policy period, an occurrence policy will typically cover you for defense and indemnity costs up to the prescribed limits.
A claims-made policy protects you from covered incidents that arise out of acts or omissions that may or may not have occurred during the policy period, but will only provide coverage for claims made during the policy period. Some claims-made policies exclude coverage for acts or omissions that occurred prior to the policy period. As long as the claim is made during the policy period, absent exclusions for prior acts or omissions, a claims-made policy will typically cover you for defense and indemnity costs up to the prescribed limits. Coverage periods can be extended by renewal. When a claims-made policy is terminated, tail coverage can be obtained to provide additional protection for claims that are asserted after the expiration date of the original policy. For reference, Weatherby’s coverage structure is claims-made and includes tail coverage for locum tenens physicians.
For all of its locum tenens physicians, Weatherby procures a claims-made policy in the amount of $1,000,000 per incident, $3,000,000 annual aggregate, except where states require other limits.
Weatherby further procures tail coverage to account for future claims that may arise. If a claim arises, it will be managed by Weatherby’s in-house claims management team who retain experienced malpractice defense attorneys in the venue where your case is filed.
Understanding the process
The more you know about how the medical malpractice process works, the better equipped you’ll be to play your part in a successful defense. For clarity, we’ve oversimplified the process here to illustrate the basic steps you can expect.
Weatherby’s risk management team has long experience with medical malpractice litigation, and they will fight the case aggressively on your behalf to achieve the best possible outcome
For an adverse event where there is no known claim or lawsuit pending, the physician will contact Weatherby Healthcare through the CHG risk management 800 number. An experienced risk manager takes confidential notes on the incident and enters them in a private database. No one other than you and your Weatherby risk management team will ever have access to these notes.
In the event of a claim or lawsuit, the process continues through a few more steps. First, the Weatherby risk management team will assign a local lawyer to your case who is licensed to practice in the jurisdiction where the incident occurred.
When we move forward with litigation, we don’t just hand everything off to local counsel and hope for the best. Your risk manager monitors every step of the case and enforces strict litigation guidelines with the entire legal team. Attorneys must adhere to our standards for details like progress reports, expert testimony, and billing.
Depending on the scope and details of the case, you may be called to give a deposition. Providing sworn evidence is an integral part of establishing the facts in a medical malpractice case. Information from depositions is often used to decide how (or whether) to move forward with a case. According to the Medscape survey, 81 percent of physicians named in a malpractice suit were called to give a deposition, so it’s important to get this right.
If the need arises, we have expert lawyers who have defended physicians for many years available to assist you with professional deposition preparation. Your Weatherby risk manager and the local lawyer we have retained for your specific matter will be with you throughout the entire preparation and deposition process.
Sometimes, insurers encourage or require physicians to settle a malpractice case. While there are situations where settlement may be in your best interest, Weatherby does not delegate settlement authority to the insurance company or the local attorney. While Weatherby Healthcare retains sole authority to settle, your Weatherby risk manager will communicate with you throughout the process and include you in any resolution decisions.
Understanding the outcomes
Unless they skim their basic policy details, many physicians try not to think about malpractice at all. Our experts agree that’s a mistake. Not all outcomes are bad: 67 percent of the doctors who responded to the Medscape survey said that their lawsuit had no negative effects on their medical career.
It’s important to know that a settlement may not prevent you from getting future jobs. Settlements are recorded in the National Practitioner Data Bank (NPDB), but they don’t necessarily prevent or preclude future hiring opportunities unless the amount, frequency, or other case particulars stand out from industry norms.
Keep in mind that many cases end in dismissal, either because we’re successful in pursuing them on legal grounds, or because we’re able to achieve dismissal on factual grounds at some later stage – up to and including trial. Dismissal can happen at almost any point in the process, either because the court decides early on that there’s no merit to the case, or because a judge or arbitrator finds in your favor.
Understanding your role
Weatherby supports you with a dedicated risk management team. When there’s an adverse event, your risk manager guides you through every step of the process.
Your obligation is to notify us immediately of any adverse patient outcome which results in injury to a patient or a claim for damages. You may contact our risk management team through your consultant, but it’s much faster for you to go directly to the risk management 800 number listed in your welcome letter. An expert risk manager will call you back within 24 hours to do an initial Q&A and get you set up for an intake interview.
These initial interviews give you a safe and supported opportunity to document any information that could benefit you in the event that legal proceedings arise from the adverse event. This information remains secure and confidential, and only your Weatherby risk management team will ever have access to these notes.
Weatherby will handle any claim that’s brought against you, retain top-tier local defense attorneys, pay all litigation costs without any erosion of your coverage, and pay damages in the event of a settlement or judgment against you in the amount of up to $1,000,000. We have a 40-year history and a verifiable reputation to back that commitment.
Based on the real-life experiences of doctors who have been sued, here are the preventive measures that most Medscape survey respondents say they would have put in place.
Frequently asked questions
Q: What is the typical length of a policy period, and what do the limits refer to?
A: Most professional liability policies are issued with a 12-month policy period. The limit of liability is the maximum amount an insurer is obligated to pay for damages under the terms of the policy. Limits are generally provided on a per-claim/-occurrence and aggregate basis. For example, a policy may have a $1,000,000 per-claim limit and a $3,000,000 aggregate limit. The most the policy would pay for any one claim is $1,000,000, and the most the policy will pay for the full policy period for all claims reported is $3,000,000.
Q: What does a policy typically cover?
A: A professional liability policy is intended to provide coverage for the physician — and, if applicable, his/her corporation (P.C.) and employees for damages resulting from the rendering or failure to render professional healthcare services.
Policies usually include any professional healthcare service specifically related to direct patient care, including but not limited to the furnishing of food, beverage, medication, or appliances in connection with such services and the postmortem handling of human bodies.
In addition, most policies include coverage for the physician while acting in his or her capacity as a member of a credentialing board or committee, and/or defense for disciplinary proceedings brought by a medical licensing board.
Q: Are there limitations on coverage?
A: Professional liability policies do include limitations and exclusions. The policy exclusion section describes each exclusion in detail, along with the circumstances under which coverage will not apply. Common exclusions include:
- Prior acts; sexual misconduct
- Suspended, revoked, or otherwise terminated license
- Criminal or willful acts
- Liability assumed under contract
Q: Is the physician required to pay a deductible?
A: Most individual physician professional liability policies do not include a deductible. Some large physician group professional liability policies do include a deductible. A deductible is the amount the insured physician is responsible for paying when there is a claim settlement or judgment. With Weatherby, you will not be responsible to pay a deductible.
Q: Which states limit the liability of physicians?
A: Currently there are several states that limit all, or certain aspects of, malpractice liability by capping all, or certain aspects of, liability components a physician may incur for any one claim. In addition, several states currently have established Patient Compensation Funds (PCF). The participation requirements vary for each of these states, and participation may be voluntary or mandated by state statute.
Q: What criteria should I use to select a professional liability/malpractice insurer?
A: Key elements for consideration include:
- Financial strength of insurer
- Policy terms and conditions
- The policy definition of a claim
- The claim handling expertise of the carrier
- “Consent to settle” terms
- Part-time credit, new to practice credit, or administrative duties only credit
- Tail coverage criteria
Q: How is a claim defined?
A: The definition of a “claim” can vary greatly from insurer to insurer. For example, a “claim” may include “incidents” or may be limited to a “written demand for payment.”
Ideally you want your policy to include an “incident trigger” in the claim definition. This means an incident that you reasonably believe can or will result in a demand for money at some point in the future is recognized by the insurer in the claim definition.
Q: How are insurers rated? Where can rating information be found?
A: Insurers are rated based on their financial conditions. The most commonly used rating resource for insurance carriers is A.M. Best. It has a two-tiered rating system including a rating for the insurance company’s ability to meet its obligations to policyholders and a rating for financial size.
- The insurance company’s ability to meet its obligations is evaluated based on the company’s financial strength; operating performance and market profile, including profitability; leverage/ capitalization; liquidity; adequacy of loss reserves; and management experience.
- The insurance company’s financial size category is an indicator of the size of a company in terms of its statutory surplus and related accounts.
- A minimum A.M. Best rating of A-, VII is recommended.
- A physician can obtain an insurer’s Best Rating by asking his/her insurance carrier, broker, or agent for a copy of the current A.M. Best Report.
Q: What is the difference between an “admitted” and “non-admitted” carrier?
A: Admitted carriers must apply and qualify financially in each state in which they wish to solicit business. They must receive approval of policy forms and rates and in return insureds are eligible for limited protection from the state guarantee fund in the event of carrier insolvency.
Non-admitted carriers, on the other hand, are exempt from state licensing requirements. Policy forms and rates are not subject to approval, nor does the state offer any protection from the guarantee fund in the event of carrier insolvency. A surplus lines tax is required for each policy written on a non-admitted basis.
Q: How does the insurance carrier determine the premium for a professional liability policy, and what is a claims-made progression (claims-made step)?
A: Carriers determine premiums based on your state of practice, medical specialty, types of procedures performed (e.g., surgery vs. no surgery), and your claims-made progression step. Some carriers also allow for additional credits based on favorable loss history, part-time practice, and or participation in preapproved risk management educational sessions.
The period of time covered under a claims-made policy increases over time, based on your initial retroactive date, and your premium is adjusted for this increased period of time over a four- to five-year period. A physician’s first year claims-made premium is only a percentage of the full four- or five-year mature premium. These percentages continue to increase until mature (fourth or fifth year, depending on the carrier). Once a mature premium is achieved, the pricing will remain relatively stable, only adjusting based on carrier-filed rate increases, negative loss history, etc.
You’re protected with Weatherby Healthcare
A malpractice lawsuit is a genuine risk for any physician, but with the right team on your side you can stop worrying and focus on taking care of your patients. Anytime you’re working a locum tenens assignment for Weatherby, our malpractice malpractice policy provides you with the protection you need in the even of a claim.
Download our complete malpractice guide for a more detailed exploration, including
- Risk by specialty
- Cost analysis
- Glossary of medical malpractice terms
For more information about medical malpractice, or for any other locum tenens-related questions, talk to a Weatherby Healthcare consultant today at 954.343.3050.