MEDMAL INSURANCE Medical Malpractice Insurance, and Medical Professional Liability Insurance in Bakersfield, Anaheim, Riverside, Los Angeles, Ventura, San Diego, CA, and Nationwide

Do you know the difference between Claims-Made and Occurrence policies?

Read on for more information.

Types of Professional Liability Insurance Coverage:

Two basic types of professional liability insurance policies exist.

Both types of coverage may not be available from all companies or in all states. Medical professional liability policies generally provide for coverage of damages that include the indemnity losses paid to the plaintiff as compensation for an alleged error or omission. Damages covered traditionally include economic loss and non-economic damages associated with the payment. Punitive damages that may be assessed against an insured due to gross negligence or willful acts are not generally covered.

Occurrence Policies

These policies cover an insured against claims that arise from an event that took place during the policy period regardless of when the claim is reported. Even if a claim is made years after the incident allegedly took place and the provider has ended his or her insurance coverage, a medical professional will be covered if the policy was in effect when the alleged incident occurred.

Claims-Made Policies

These are policies that cover an insured against claims reported during the policy period. When the policy has expired and a claim arises, the insurance company is not obligated to provide coverage for claims made after the expiration date, unless a reporting endorsement has been purchased by the insured. Claims that occur before the first date of coverage (retroactive or retro date) are also not covered.


Cost Comparison: Claims-Made vs. Occurrence

The medical professional liability insurance marketplace can be difficult to understand. Not understanding may lead to costly mistakes. There are two basic forms of professional liability insurance coverage: Claims-made vs. Occurrence. There are substantial differences between these two forms of medical malpractice insurance — see Glossary of Terms for definitions. Much has been written regarding the pros and cons of both forms. However, pricing has not always been included.

Following are the manual rates for the specialty of General Practice–No Surgery, in Los Angeles County, CA with liability limits of $1,000,000 per claim/$3,000,000 annual aggregate, from an “A++” Rated company offering both types of coverage.

Year Premium Total Premium Total
1 $ 2,758 $9,570
2 $ 5,170 $9,570
3 $ 6,978 $9,570
4 $ 7,753 $9,570
5 $ 8,615 $31,274 $9,570 $47,850
6 $ 8,615 $9,570
7 $ 8,615 $74,349 $9,570
8 $ 8,615 $9,570
9 $ 8,615 $9,570
10yrs $ 8,615 $9,570 $95,700
20yrs $160,499 $191,400

The comparison is not complete without adjusting for the cost of tail coverage on the claims-made form. The cost of tail – from this particular company – is 180% of expiring premium. Do the math using your current claims-made premium.


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