Malpractice Insurance FAQs: What Is a “Retro Date”?
Malpractice insurance (sometimes called professional liability insurance) can be confusing, but as a medical professional, you need to be sure you’re getting it right. To help you, we’ve collected some of the most common questions our customers have so you can be sure you’re fully informed.
Malpractice Insurance FAQs: What Is a “Retro Date”?
Am I Required to Have Insurance?
Whether medical practitioners are required by law to have professional liability insurance depends on the licensing authority of the area they’re practicing in. In the USA, the requirement to have insurance varies from state to state. Most do not require insurance but will often have stipulations that practitioners without insurance must adhere to. The states that do require insurance are Colorado, Connecticut, Kansas, Massachusetts, New Jersey, Rhode Island, and Wisconsin, but the level you’re required to carry varies as well.
Often, even if the state doesn’t specifically require insurance, it’s far easier to just take out a policy. For example, in Florida, medical professionals without insurance must post a bond, have an escrow account, acquire an irrevocable letter of credit from a bank or other lender that cannot be used for legal fees, and post a sign on their premises informing all customers that they are without insurance, all while still shouldering the huge risk of having to defend any litigation completely out of pocket. It’s much easier and safe, and often cheaper, just to take out a policy.
What Is a Retro Date?
A “Retro Date”, or retroactive date, is the date from which you’ve held uninterrupted professional liability insurance coverage. This isn’t affected by a change of insurer, so long as you’ve held a continuous policy. Your insurer may also agree to cover you from a specific past date, even if you didn’t hold insurance at that time. Any claims arising from events after this date are covered; events before are not. A retro is only applicable to “claims-made” insurance policies. More on this below.
For example, say you’re the victim of a lawsuit that claims you acted unprofessionally on the 24th of October 2013, and you’ve held a continuous claims-made policy since June 2010. In this case, your insurance should cover the legal cost of the lawsuit. However, if you had a gap in your insurance between 2015 and 2016, then your retro date will only be until 2016, so you will not be covered unless your insurance provider has agreed to a retro date before the claimed events. This is why it is important to maintain continuous coverage.
What Is the Difference Between a Claims-Made Policy and an Occurrence Policy?
An occurrence policy will cover all incidents that occur within the policy period, no matter when the claim is reported. This means that even if a claim is reported after the policy has ended, for example, if you switch to another provider, you’ll still be covered by the original policy.
Let’s take the previous example of a claim related to an incident on the 24th of October 2013. Say you canceled your policy in 2015, but you’re then the victim of a lawsuit in 2018. In this case, you’re still covered by your original policy, as it was active at the time of the incident. However, if you had taken out a claims-made policy, then you would not be covered unless the claim was made during the period of the policy. That is unless you take out “tail coverage.”
What Is “Tail Coverage”
Tail coverage is an optional add-on that can often be purchased with claims-made policies to extend the reporting period past the end of the policy. If you had purchased tail coverage on the claims-made policy above, then your original insurer would still be liable to pay for the suit in 2013, even though your policy had ended. It is not uncommon in the malpractice world for patients to bring a lawsuit many years after being treated if they believe current health issues stem from treatment they received years ago. So even when you stop practicing, it’s important to understand your coverage and consider tail coverage if you had a claims-made policy
Can an Insurer Cancel My Policy or Not Offer Renewal Terms?
Yes, there are several reasons why your insurance provider may refuse to renew your policy or cancel it outright. The most obvious reason for this is non-payment of premiums, but there are other reasons as well, including fraud or misrepresentation on the application or renewal application, or due to your claims history.
Another factor that could spell the end of your policy is if any illegal, reckless, or otherwise unsavory actions come to light that would increase the risk of your policy, especially if it becomes clear that insuring you would put the insurer in violation of the law in your jurisdiction. If your license to practice is suspended or has restrictions placed on it then this could also be problematic for your coverage.
NOW Insurance has the expertise to provide malpractice insurance and handle claims relevant almost every profession in the healthcare space. We are committed to providing polices that are simple, fast and affordable to the healthcare sector.
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