Claims-Made vs. Occurrence -Made malpractice insurance

Which malpractice insurance should I buy?

As a healthcare professional, you know you must have malpractice insurance. But you have the decision to make whether to buy an occurrence-made policy or a claims-made policy. What’s the difference between these two types of malpractice Insurance policies?

Remember: Both claims-made and occurrence policies will provide you with a legal defense for claims of malpractice and Both types of policies will pay for covered damages for injuries.

What's an Occurrence-based malpractice Policy?

An occurrence-based malpractice insurance policy covers claims that may come up from services you performed when the policy was active even if the claim is brought after the policy has expired. For example, a Nurse practitioner (NP) has performed a procedure for a patient while the policy premium was in effect, but the patient sues the NP  3  years later. If the NP  had an occurrence-based policy in effect when the incident “occurred” the NP  can call on the policy to cover the claim.

Another example is the Nurse practitioner had occurrence-based insurance since she started working five years ago at the ABC Healthcare Organization. She treated a patient for severe headache during her employment at ABC healthcare, unfortunately, the patient died later due to some complications, and the family brought a lawsuit against the NP years later, she will still be covered though the claim is brought years later and she no longer works for the ABC  Healthcare organization.

Benefits of an Occurrence Policy

An occurrence-based malpractice insurance policy is a straightforward way to ensure that you’ll have malpractice insurance coverage even after you no longer work for the employer. Occurrence-based malpractice insurance brings peace of mind knowing that the policy you purchased back when the patient was treated will be effective whenever the patient brings a lawsuit. Remember prior incidents are not covered.

 Occurrence-based malpractice is more expensive than the Claims-based Malpractice Insurance

What's a Claims-Made malpractice Insurance Policy?

A claims-made ( aka  Claims-based) malpractice insurance policy covers claims made during the policy period. If the incident occurred during the Claims-made malpractice policy period,  the claim will be covered in other words, if the lawsuit is filed during the employment while the premiums are still being paid, the claims will be covered. Remember you will be covered only during the period that the policy was in effect. If you have stopped Claims-made malpractice insurance for any reason, you must buy extended coverage (aka tail coverage), With a claims-made malpractice insurance policy, if you stop practicing or let your policy expire without renewing it, you will not be covered for future claims that stem from past services or treatments.

For example, a Nurse practitioner has stopped working as a nurse practitioner for the XYZ healthcare organization. A patient has brought a lawsuit against the NP after she stopped working for the XYZ healthcare organization. The NP will not be covered because she no longer works with XYZ, and the insurance premiums are not being paid, though the incident occurred while she was employed at the XYZ Healthcare organization. The NP could  have been covered if she had purchased  “tail coverage”

Claims-based malpractice insurance premiums are less expensive than Occurrence-based malpractice insurance

The million-dollar question is: which malpractice insurance will you buy?

Is it Occurrence-based malpractice Insurance or Claim-based ( or Made) Malpractice insurance?