Claims-made and
Occurrence
are the two most poplular types of medical malpractice insurance policies. Of the two, most providers choose claims-made policies.
Claims-made pricing:
Claims-made pricing starts out relatively inexpensive in year 1 and gradually increses in cost until years 4 or 5, and then plateaus in cost.
It is important to note, however, that providers will most likely need to purchase a
tail policy after their claims-made policy ends. Tail coverage usually costs 2-3x the expiring premium. Purchasing a
stand alone tail
can usually save providers some money, as they can cost as little as 1.5-2x the expiring premium.
Occurrence pricing:
Compared to claims-made policies, occurrence policies tend to start out more expensive and stay expensive. However, they do not require the purchasing of a tail when the policy expires.
Thus, in the end, generally speaking, the overall cost for a claims-made policy and a tail vs the overall cost for an occurrence policy tends to be similar, and a provider should choose a policy based on the type of coverage they would prefer and their financial situation. If they would prefer to save money up front and pay more later, they should select a claims-made policy with a tail. If they would prefer to pay a higher, more consistent premium without having to worry about the cost of a tail several years down the road, they should select an occurrence policy.
To learn more about other factors that impact the cost of liability insurance, click
here.
