By Lynn Trentini, Business Insurance Account Executive
Many physicians make the difficult decision to retire from practice, only to find themselves missing their busy schedule or the day-to-day interaction with patients and staff. As a result, returning to work in some capacity is appealing – whether to help out a colleague, work part-time at a healthcare clinic, or volunteer in an underserved area. Retired physicians who are considering a return to work, and were previously insured on a Claims Made policy, should be aware of the following limitations: Most Claims Made insurance contracts specify that if you cancel your policy due to retirement, and a free Claims Made tail (Extended Reporting Endorsement) has been issued, you cannot return to work in any capacity without jeopardizing your free tail. In some cases, a very limited schedule is allowed (volunteering or 10 hours/week or less for compensation), but not by all insurance carriers. Your previous Claims Made policy does not protect you for any new professional activities you may engage in. So, while you may have a “free tail” on your previous policy, you need to obtain a new policy to cover current and future work you choose to do. Fortunately, there are options going forward, however, you need to discuss them with your insurance broker to find the best solution for your specific plans. Purchasing another Claims Made policy for your new professional activities may not be the best option, depending on the number of years you plan on working as well as other factors. This is a common challenge and one we have helped many physicians find solutions for, that are both cost effective and provide the best protection for them and their practice.
Understanding a few common policy terms:
|Claims Made Policy: This covers incidents that occur and the corresponding claims that are made while your policy is in effect. If your Claims Made policy has cancelled, and a claim is reported years later (common in malpractice cases), your policy would not respond unless you had an Extended Reporting Period or “Tail” coverage in place.
|Tail Coverage or Extended Reporting Period: This coverage protects a Claims Made policyholder from claims that are reported after termination of coverage, for an incident that occurred while your policy was in effect. “Tail” coverage, or an Extended Reporting Period, is just that – it allows claims to be reported for an extended period of time (often an unlimited period) after your policy has cancelled.
|Free Claims Made Tail: There are circumstances under which you can qualify for “free” tail coverage – most carriers include a “DDR” clause: a free tail for Death, Disability, or permanent Retirement from practice. Each of these would result in the same Extended Reporting Period, at no additional cost.
|Occurrence Policy: This covers claims from incidents that occur while your policy is in effect. If your occurrence policy has cancelled, a claim could be reported years later and, as long as your policy was active at the time the incident OCCURRED, your policy would respond. No “Tail” is necessary.
For more information please contact Lynn Trentini, Business Insurance Account Executive at or LTrentini@Onegroup.com
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.