5 Things Psychiatrists Should Avoid When Buying Malpractice Insurance

You have insurance coverage.

You received the lowest rate and have the certificate of insurance.

You are properly insured, right?

Perhaps not.

Here are five of the most common issues you should avoid when choosing a policy.

1. Having a “conditional” consent to settle clause in the policy.

Even though “consent to settle” clauses are common, if an insured doctor wants to defend a lawsuit and the insurance company prefers to settle, some policies require  arbitrators to settle the dispute. Ultimately, this may favor the insurance company rather than you.  Or, in some policies, the insurance company will make you pay for a portion of the claim if you did not agree to the amount they wanted to pay and the jury awarded a higher amount.  This is referred to as a “hammer clause”.

Always read the fine print and make sure to choose a policy that will properly represent your best interests by not having an arbitration clause or a hammer clause. With The Psychiatrists’ Program, our client-focused policies do not include these clauses.

2. Paying hidden costs.

A low premium won’t always end up saving you money particularly when you are faced with the bill for upfront defense costs, high deductibles or inadequate coverage for medical board investigations.

Did you know that psychiatrists are more likely to be reported for medical board complaints than named in a lawsuit?  And states are obligated to investigate all board complaints.  Your insurance company may require you to find an attorney, pay defense costs upfront and then apply for reimbursement.  Some insurance companies also have hefty deductibles for this coverage.  Check the limits on your current policy. Some companies may only quote you defense coverage as low as $5,000 in their standard policy and then require you to pay more for appropriate coverage.

With The Psychiatrists’ Program, we automatically provide $50,000 per complaint/$50,000 per policy limits for medical board complaints.  We also do not assess deductibles for these claims and we pay all covered claims directly to the attorney. No additional premium is charged* and you don’t have to pay for these costs upfront.

3. Choosing a policy with risk management services not specifically designed for psychiatrists.

Other insurance companies usually comingle psychiatry rates and policies with physicians in other specialties. In terms of risk management advice, multi-specialty insurance companies often generalize their information or develop educational material focused on primary care physicians due to their large numbers or on specialties such as surgeons. As a result, you may not receive the specific advice relative to your practice of psychiatry.

The Psychiatrists’ Program’s policies and services are designed specifically for psychiatrists and groups of psychiatrists with behavioral allied healthcare professionals. The policy is customized to define psychiatric services.

A hallmark of our program is our commitment to providing clients with psychiatric-specific risk management services. We believe risk management – and convenient access to risk management information – is essential to your practice. Our risk management advice is based on our superior experience in handling more than 22,000 psychiatric claims, lawsuits and significant events and addressing over 44,000 psychiatric risk management questions and issues through our toll-free helpline.

4. Paying extra for CMEs and risk management education.  

Some companies require psychiatrists to pay third-party companies for CMEs because the insurance company does not offer the service in-house or as part of its insurance package.

The Psychiatrists’ Program provide CME risk management education to all of our insured clients, free of charge. We are accredited by the American Council for Continuing Medical Education and achieved ACCME Accreditation with Commendation – a level awarded to only 21% of accredited companies.  This speaks to the quality of our education both in-person and online.

5. Selecting an insurance company that doesn’t have psychiatric claims experience.

At the end of the day, it is about results. Will your insurance company be there for you and act in your best interest when a claim is brought against you? How has your insurance company performed?

In the nearly 30 years of our program’s existence we have won 99% of claims that went to trial for a verdict. You can read more about our 2013 claims results in our Year in Review. 

Choosing the right medical professional liability insurance can be a complicated and confusing process, but we are here to help you avoid these common pitfalls and many others.

To ask a question or get a free assessment and quote, contact me at (800) 245-3333 or TheProgram@prms.com.

*Maryland regulations require separate charges but we still automatically provide $50,000 per complaint/$50,000 per policy limits for medical board complaints.  Proper coverage and your professional reputation is important.

Rich Stagnato, PRMS Account Manager Mr. Stagnato is responsible for new and renewal business, providing customer service, insurance counseling as well as obtaining competitive data on the medical malpractice market. He is a licensed Property and Casualty agent. Richard Stagnato rejoined PRMS in 2004 after almost a year as an underwriter at NCRIC. Prior to joining the company in 2000, he had been an insurance specialist for five years with the Boat U.S. insurance program.