Can You Get Medical Malpractice Insurance After a Claim?
A malpractice claim can make purchasing professional liability insurance more complicated.
But one of the biggest misconceptions physicians have is that a previous claim automatically makes them uninsurable.
It does not.
Medical malpractice insurers evaluate the complete risk.
A physician with one prior claim may still have multiple options, while another physician with several recent claims, licensing concerns or an unresolved lawsuit may require placement with a more specialized insurance market.
The important issue is not simply whether a claim exists.
It is what happened and what the claim tells the underwriter about future risk.
One Claim Does Not Tell the Entire Story
Consider two physicians.
The first has practiced for 20 years and has one closed claim.
The second has practiced for six years and has three recent claims involving similar allegations.
Both technically have a “claims history,” but an underwriter is unlikely to evaluate them the same way.
Medical malpractice underwriting usually involves context.
Insurers may examine how often claims have occurred, how severe they were and whether there appears to be a pattern.
What Will the Insurance Company Review?
When a physician reports prior malpractice activity, the insurer may request additional documentation.
Loss runs are particularly important.
Loss runs generally provide information about previous claims and may show dates, status, amounts paid and other information maintained by the prior insurer.
The underwriter may also request a written explanation of individual claims.
This is why physicians with previous losses should obtain updated loss runs before the renewal deadline.
Waiting until the final days before expiration can significantly reduce the amount of time available to evaluate alternative markets.
Does the Settlement Amount Matter?
Yes, but it is not necessarily the only factor.
A large settlement will obviously attract underwriting attention.
However, insurers may also consider the nature of the allegations and circumstances surrounding the case.
A smaller settlement involving a unique event may be evaluated differently from repeated claims alleging the same clinical issue.
Defense costs can also matter.
Even when indemnity payments are relatively limited, defending malpractice litigation can be expensive.
Open Claims Create Additional Questions
An open claim presents more uncertainty than a closed claim because the final outcome is not yet known.
Underwriters may want information about:
Current case status, reserve amounts, allegations, defense strategy, potential damages and whether additional similar incidents exist.
Some insurers may still consider the physician.
Others may want the matter resolved before offering terms.
This is one reason carrier appetite varies considerably.
A decline from one insurer does not necessarily mean every carrier will make the same decision.
What if Your Carrier Non-Renews the Policy?
A non-renewal can be stressful, particularly when the physician also has hospital credentialing or contract requirements.
But physicians should distinguish between:
A policy being non-renewed, a policy being cancelled, and a physician voluntarily changing carriers.
These events can have very different underwriting implications.
If you receive notice of non-renewal, begin looking for alternatives immediately.
Do not wait until the week before expiration.
The broker may need time to collect:
Applications, claims explanations, loss runs, curriculum vitae, licenses, board certification information, current policy documents and additional underwriting information.
The more complex the history, the more important preparation becomes.
Board Actions and Licensing Matters
Claims are not the only issues malpractice underwriters evaluate.
Professional licensing actions, board complaints, disciplinary history, restrictions or other regulatory matters may also require explanation.
Again, a problem does not necessarily mean automatic rejection.
However, incomplete or inconsistent information can create a more difficult underwriting situation.
The best approach is transparency.
Your broker should understand the issue before approaching carriers so the submission can be presented accurately.
Prior Claims Make Your Broker More Important
Straightforward physicians with clean loss histories may have many available carrier options.
Complex physicians require something different.
They need a broker who understands how to organize and present the risk.
A submission simply stating:
“Physician has three claims.”
does not tell the complete story.
A stronger underwriting presentation provides context.
For example:
How long the physician has practiced.
How many procedures have been performed.
What happened in each claim.
Whether similar allegations exist.
What corrective actions were taken.
Whether practice protocols changed afterward.
That does not guarantee acceptance.
But it gives the underwriter a much better basis for evaluating the physician fairly.
Do Not Hide Claims
Failing to disclose known claims or disciplinary matters can create serious problems.
Applications should be completed accurately.
If you are unsure how a question applies to your circumstances, speak with your broker before guessing.
An insurance application becomes part of the underwriting process, and inaccurate answers can have consequences.
Can You Switch Malpractice Carriers With Prior Claims?
Potentially, yes.
But physicians using claims-made coverage must pay particular attention to their retroactive date.
A new carrier may provide prior-acts coverage back to the existing retroactive date, depending on eligibility and underwriting.
Alternatively, tail coverage may be required from the previous carrier.
Never cancel an existing claims-made policy until you understand how prior incidents will remain protected.
You can learn more on the Island Insurance Group Medical Malpractice Insurance page.
Find Out How Your Risk May Look to an Underwriter
If you have prior malpractice claims, a settlement, board action or another underwriting issue, gathering information early is one of the smartest things you can do.
Our free Physician Underwriting Assessment helps physicians review factors that may affect insurance underwriting before starting the quotation process.
Complete the Free Physician Underwriting Assessment
Island Insurance Group works with physicians and medical practices, including risks that may require additional underwriting attention.
Samuel Bennett — Licensed Insurance Agent
Island Insurance Group
sam@islandinsurancegroup.com
954-804-8144
Schedule a 30-Minute Consultation
Medical practices can also review broader exposures using our free Small Business Insurance Assessment Tool.
Insurance availability and terms depend on carrier underwriting. No particular carrier, premium or coverage outcome is guaranteed.
