- Is the policy claims made or occurrence based?
- Does your insurance policy only cover professional negligence claims? Does your policy cover claims of unprofessional conduct reported to state medical licensing boards? Does your policy cover punitive damages, intentional misconduct, or contractual indemnity claims?
- How is “loss” defined? “Pure loss” is coverage for the amount awarded to the person who brought the claim. “Ultimate net loss” covers what pure loss covers plus attorneys’ fees and costs.
- What procedures do you need to follow in order to properly notify the insurance carrier of a claim? Are you precluded from full coverage if you fail to properly report?
- What does the “duty to defend” provision cover? Will you be reimbursed for lost wages for your time when in court? What services will be provided as part of your defense?
- What does the “consent to settle” provision say? If a settlement is negotiated between the person who brought the claim and the insurance company and you do not consent to the settlement, are you responsible for the ongoing defense costs and the amount of any verdict in excess of the recommended settlement amount?
It is important to understand what your insurance policy and employment agreement say about your coverage. If you will be responsible for purchasing a tail policy at the end of an employment relationship, you should be aware of this postemployment responsibility so that you are financially prepared.
Steven M. Harris, Esq., is a nationally recognized healthcare attorney and a member of the law firm McDonald Hopkins, LLC. He may be reached at [email protected].
