Q&A: What locum tenens docs should do about tail coverage

May 22, 2009

It appears that I would be exposed to potential liability claims if my locum tenens company terminated business because, in this event, there would be no tail policy.

Q: I am a diagnostic radiologist who is doing work through a locum tenens company. The company arranges the jobs for me, reimburses me, and pays my malpractice insurance via a claims-made policy. The company has stated that it will pay for a tail policy if the current insurance expires. It appears that I would be exposed to potential liability claims if the locum tenens company terminated business because, in this event, there would be no tail policy. Are my concerns valid, or am I being overly conservative?

A: Your concerns are valid, as there are several potential problems with arrangements similar to yours. You mentioned that the company has assured you that it will pay for a tail policy when your coverage terminates. However, it is important to understand the nature of the policy you are written on so that you can ask the appropriate follow-up questions. Claims-made policies offer only temporary coverage, which expires unless it is either renewed or continued through the purchase of extended reporting coverage, a "tail."

The policy you are written on seems like a "perpetual" claims-made policy, coined for its provision that does not require (or even permit) individual physicians to purchase tails as they come and go. Rather, coverage remains in effect on a blanket basis for all related claims as long as the policy is renewed each year. Therefore, your main risks are associated with the policy not renewing for any number of reasons, at which time the tail options will be triggered.

To plan properly, it is critical to understand how the company intends to protect you after your relationship ends. You should get written clarification from the risk manager at the locum tenens company regarding the details of your insurance coverage as soon as possible.

Send your practice management questions to mepractice@advanstar.com (please include your regular postal address). Answers to our readers' questions were provided by Steven I. Kern, JD, of Kern Augustine Conroy and Schoppmann in Bridgewater, New Jersey; Brian S. Kern, JD, of Argent Professional Insurance Agency in Warren, New Jersey; and Judy Bee of Practice Performance Group in La Jolla, California.