Personal Liability Insurance
Insight – 1 All PLI policies are definitely not created equal; simply purchasing a policy doesn’t protect us from claims that arise from our work. And residency training doesn’t prepare us for the realities of the business and legal world. Inexperienced physicians who overlook the details of the “business end” often learn their lessons the hard way. None of us can expect patients to “forgive” us simply because we didn’t understand or pay attention to the details of our PLI coverage. In the past, most PLI policies were occurrence policies. They were more expensive but covered claims arising from events within the specified policy period, no matter when a claim was later filed. Claims-made policies, however, are considerably less expensive and almost the only type of policy available in today’s environment. They provide coverage for claims arising from incidents that both occur and are reported to the insurance company while the policy is in force.9 Such policies are in force from the starting date of the initial policy period and continue in force through each subsequent renewal. When a claims-made policy is terminated, future claims arising from incidents that occurred during the policy period are covered only if a separate “tail” is purchased. A tail policy is typically a supplement to a claims-made policy: it covers the time from when the previously held policy expired or was canceled into a specified period of time in the future. Tail coverage can cover varying periods of time at varying rates.10 Because some claims can be filed up to 20 or more years after an event, many physicians purchase a tail that protects them for many years. Most claims, however, are filed within 2 to 3 years of an event, and these initial years of extended coverage are more expensive compared to purchasing longer extended coverage. Sometimes a new insurer or group will provide an individual physician with “nose” coverage for potential claims that arise from previous employment and are not covered by other insurance. In other words, nose insurance is a retroactive substitute for tail insurance.11,12 But because insurers rarely want to accept the unknowns and potential risks from an individual and his or her past practice history, nose coverage is seldom offered and difficult to find. (ACEP Foresight)