Medical Protective (part of the Berkshire Hathaway group of companies) is reintroducing the Occurrence coverage form in many states, including those in the west. Occurrence form used to be the only coverage form prior to the crisis in the medical malpractice insurance industry in the 1980’s. Essentially tail coverage or extended reporting coverage is built into the policy. Although this coverage form does not benefit all physicians, there are specific circumstances where it may be advantageous:
Increased freedom for physicians who may need to move from one state to another for practice opportunities. It is frequently a problem to have a carrier in the new state provide prior acts coverage for services provided in another state Group practices may find the occurrence coverage form the way to go when hiring a new practitioner. The group and the physician may not be compatible and the occurrence form makes the trial of a new physician a cleaner and less complicated situation for all.
Occurrence coverage may provide a physician with the availability of more limits to cover claims arising out of services provided in multiple practice years.
Although claims made coverage may provide free tail coverage for physicians who die, are permanently disabled, or retire and meet the vesting requirements, there are many instances when a physician has to purchase tail coverage. There is no need to purchase tail coverage when the occurrence policy is canceled, no matter what the reason. I recently met a physician who canceled a claims made policy and was not financially able to purchase tail coverage at the time. He experienced difficulties obtaining new coverage due to this bare period. This would not have been an issue had he had an occurrence policy.