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Liability insurance offers more than it used to
As more carriers have entered the malpractice insurance marketplace, the competition has created several new options. They can either be included in a basic package or available individually for an added premium. Here are some of the new features, as well as some standard enhancements you may not be aware of. We'll also tell you about policy features to steer clear of.
Billing errors and omissions defense coverage. Insurance companies are starting to offer special policies for doctors who are accused of Medicare and Medicaid fraud. But be careful to review the policy's wording. At best, some companies will share in the payment of fines and penalties. But most insurers limit their coverage to attorney and auditing fees associated with an investigation of fraud or abuse.
Consent to settle. Do you have the final say on whether to settle a malpractice claim? While many insurers offer this as standard coverage, some provide it only at the request of the insuredand for an additional premium.
It's important coverage to have. While it may be in an insurer's interest to avoid the risk of a jury verdict, it's not always in a doctor's interest. Settlement of a nonmeritorious case can damage a physician's reputation and must be reported to the National Practitioner Data Bank.
If you're interested in this coverage, watch out for language known as the "hammer clause." This means that if the company is able to settle a case but the physician refuses, the physician is responsible for any additional expenses, settlement, or verdict dollars that exceed what the insurer would have paid to settle.
Legal expense coverage. This kicks in when a physician is asked to participate in an interview, hearing, or deposition before a review board or disciplinary committee when a colleague is under investigation for malpractice. It also covers a physician who's been accused of improper professional conduct himself and must participate in a disciplinary proceeding or licensing board action. Most carriers pay between $5,000 and $50,000 in attorney fees per incident.
Insurance companies have started to offer this coverage as a way to prevent claims, because having an attorney present in these instances can help a physician avoid being pulled into a lawsuit later. This is a significant benefit, since most policies don't respond until a claim for damages has been presented. Consider it a prepaid legal expense when you need it most.
Loss of income. Attending a trial or hearing can be a long, arduous, and costly process, and most policies will reimburse you for lost income as well as reasonable expenses. The benefit can range from $200 to $500 per day. This coverage will usually be triggered after the insurer has specifically requested your assistance in the investigation or defense of any claim against you or another provider.
Sexual misconduct defense coverage. While most of these claims are resolved without payment, the legal fees associated with defending them can be substantial.
No insurer can defend you against a criminal charge. This coverage is intended only for defense in a civil proceeding, and there is usually language stating that this must relate to professional health care services such as inappropriate conduct during a patient examination.
Equipment maintenance. Not exactly what you'd typically look to your medmal carrier to provide. Nevertheless, some malpractice insurers have taken aim at maintenance contracts for medical, office, and air-conditioning equipment.
Insurers realized that these contracts are often confusing and costly. So some malpractice carriers now offer options to include all of the equipment on one policy, and provide management reports to track the efficiency of their operation.
There are significant variations in these optional coverages depending on the company and state law. Check with your carrier or with an insurance agent you trust.
John Marshall. Malpractice Consult. Medical Economics 2001;9:112.