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. Not having enough licensing board defense coverage.

PRMS is seeing increased licensing board activity for many reasons such as aggressive boards, greater public attention, easy online access for the public to make complaints and the state’s obligation to investigate all complaints.

Some policies include a basic limit to defend against a board investigation and then charge more if you want higher limits.  PRMS knows the importance of protecting your license and reputation so our policy includes a separate limit up to $150,000 at no additional charge. 

 2. Only one policy type to select from.

Some companies only offer claims-made policies.  However, PRMS offers you a choice.  There are two common policies to consider.

–Claims-Made:  This policy protects you in a practice-related legal proceeding if the policy is active when the “claim” is “made” against you during the policy period.  The limits of liability in effect at the time the legal proceeding is made will apply.  If you cancel your policy, you cannot report legal proceedings and should consider additional coverage to extend the reporting period – this is commonly called tail coverage. 

–Occurrence:  This policy protects you in a practice-related legal proceeding if the policy was active at the time the treatment or incident occurred, regardless of when the lawsuit is filed.  You don’t need to buy tail coverage with an occurrence policy. 

We will explain your options so you can decide what works best.  Also, PRMS waives tail coverage costs in certain cases such as retirement, longevity with the program, death or permanent disability. Learn more about tail coverage here.

 3. Speaking of tail, some insurance companies have limited options for waiving tail coverage costs.

Tail coverage can be expensive.  The good news is that if you have a claims-made policy with another company, you do not need to buy your insurer’s tail because you may transfer your retroactive date to a policy through PRMS.  

Some companies waive tail costs only if you retire, become permanently disabled or die.  PRMS also waives tail costs for those reasons (retirement means permanent retirement after 5 years’ continuous coverage at age 55+).  However, we also waive tail costs if you maintain a claims-made policy for 10 consecutive years (presuming you are claim free or had no surcharges for claims on your policy).  In most states, we count your previous companies’ claims-made policy years toward the 10-year rule.

 4. Choosing an insurance company with risk management services not specifically designed for mental health.

Other companies usually comingle psychiatry rates and policies with other specialties. In terms of risk management advice, multi-specialty companies can generalize their educational material focused on primary care physicians/surgeons due to their large numbers and higher risk.  As a result, you may not receive enough advice for mental health.

PRMS policies and services are designed for psychiatrists and groups of psychiatrists with allied behavioral healthcare providers.  We are committed to psychiatry-specific risk management services.  We believe risk management – and complimentary access to information and CMEs (PRMS is ACCME accredited) – are essential.  Our advice is based on our superior experience in managing psychiatric claims, lawsuits and significant events for over 30 years as well as addressing about 70,000 psychiatric risk management questions and issues.

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

At the end of the day, it is about results. Will your company be there for you and act in your best interest when a claim is brought against you?  Do they normally manage psychiatry claims?  Does your company outsource claims defense?

In the over 30 years of our program’s existence, we have managed all claims in-house (no outsourcing).  Also, most of our clients’ claims are dismissed.

Choosing the right malpractice insurance can be a complicated and confusing process, but we are here to help you avoid these and other common pitfalls.

To ask a question or get a personalized rate indication, contact us at (800) 245-3333 or TheProgram@prms.com.

The content of this article (“Content”) is for informational purposes only. The Content is not intended to be a substitute for professional legal advice or judgment, or for other professional advice.  Always seek the advice of your attorney with any questions you may have regarding the Content.  Never disregard professional legal advice or delay in seeking it because of the Content.

©2018 Professional Risk Management Services, Inc. (PRMS). All rights reserved.

Actual terms, coverages, conditions and exclusions may vary by state. Insurance coverage provided by Fair American Insurance and Reinsurance Company (NAIC 35157). FAIRCO is an authorized carrier in California, ID number 3175-7.