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IDS Malpractice Report - August 2003
'Claims occuring' or 'Claims made' policies - the choice for practitioners of Alternative/Complementary medicine
By Ken Bachelor
One of the most confusing questions about professional insurance, is which is better: a policy based on a claims occurring wording or one based on claims made. The reason for the confusion is that in a malpractice case, there are two important dates: the date on which the consultation took place, and the date on which the claim was received. A patient you cared for today may not sue you for months or even years.The advantages and disadvantages:
| Claims Occuring | Important date - the date the consultantion takes place. Your policy must be in force 'while you are working' and need not be kept in force if you take time off for extended periods such as travel, pregnancy, or if you decide to work abroad, etc. The major advantage of the IDS occurrence wording is that every claim will be settled with the full limit of indemnity, unlike an aggregate policy where you may be unable to work at all if you receive a totally unrealistic claim until you have contacted your insurer and arranged further cover. A suggested disadvantage of an occurrence wording is that a claim will be settled at the limit of indemnity on the day of the consultation, however, in practice this is not a problem as a claim must be lodged within 3 years of the patient first becoming aware of the need to make a claim so we are not dealing with extended periods of inflation. Subject to a satisfactory claims history, it is normally possible to provide retroactive cover for anyone who has previously been insured under a claims made policy for a small one-off additional premium. |
| Claims Made | Important date - the date you receive the claim. The policy must be in force at all times 'whether you are working or not'. In particular this leaves you vulnerable should your insurer decide not to offer renewal as you will need to find another willing to accept responsibility for claims relating to treatments carried out while you were the client of another provider and whom you have already paid for the protection. Most brokers suggest that should you want to terminate their 'claims made' policy, run off will not be a problem. In our experience requests are more likely to be met with 'I'm sorry but we do not provide run off in these circumstances', or in one recent case where the underwiter had not offered renewal, the broker was unable to do so. |
Ken Bachelor is the founder of Insurance Data Services and as its creator, has worked continuously to update the IDS policy since 1982 ensuring that it provides the best cover available for practitioners of alternative/complementary medicine |
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