Medical professional liability insurance
Insurance protects the individual against the risk of loss by distributing the burden of losses over a large number of people, based on the law of averages. In medical practice, professional liability insurance is a contract in which the physician pays a specific premium to the insurance company or carrier, which in turn agrees to pay a party injured or harmed by the negligence of that physician the sum awarded by settlement to compensate for the losses resulting from the injury. Like other insurance providers, medical liability carriers have a duty to act in good faith, which includes the requirement to defend the insured throughout all phases of the judicial process.
Most radiologists never read their medical professional liability insurance contracts at the time of purchase, only looking at them after a malpractice action has been filed against them. The essence of the insurance contract is an attempt to define those losses that are covered by the agreement and those that are excluded. It typically is written in tortured legal prose that has a readability index indicating that it is less understandable. Nevertheless, it is essential that radiologists have a reasonable understanding of the extent and limitations of prospective liability insurance contracts before purchasing malpractice policies, which generally represent the most important and expensive outlay that they make in their professional careers.
There are two types of medical professional liability insurance policies: occurrence and claims made. Occurrence policies cover claims of alleged malpractice occurring during the policy period, regardless of when the lawsuit was filed or when the insurer was notified of the claim. Claims made policies cover only claims of alleged malpractice reported during the policy period, regardless of when the service that is the basis of the claim was rendered.
If a radiologist maintains medical professional liability insurance policy with the same company during his or her entire professional life, there is little difference in actual coverage between the occurrence and claims made policies that are offered today. However, the distinction between these insurance products can have profound effects when a radiologist changes policies or retires.
Most policies were of the occurrence type. However, since the injuries resulting from medical malpractice may not become apparent for years after the incident, it was difficult for the insurance companies to accurately calculate the premium for risks. With inflation and spiraling jury awards, insurance companies sustained significant losses. Consequently, the vast majority of medical professional liability insurance companies shifted to claims made policies, which precluded them from responsibility for claims that arose after the expiration of the policy and thus enabled them to calculate premiums with more prevision.
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