What is the difference between a Claims-Made and an Occurrence policy?
Claims-Made policies provide coverage for all Claims-Made during the period a policy is in force. A reporting endorsement (or tail) is usually purchased (and recommended) to protect the insured from all future claims arising from incidences that occurred while covered by the carrier.

Occurrence policies protect the insured against all claims that may result from services rendered while a policy is in effect without regard to the date an actual claim is discovered. This form of professional liability insurance has sheltered physicians since the inception of medical malpractice coverage.

Do Claims-Made and Occurrence policies provide coverage in all fifty states?
No. While Occurrence coverage is accepted in all fifty states, some Claims-Made policies may exclude the following states: Alaska, Hawaii, Kansas, Massachusetts, New Mexico, New York, Pennsylvania, Wisconsin, Indiana, Kansas, and Louisiana. It is important to ask any locum tenens agency which offers Claims-Made coverage if they can provide services in every state.

Are agencies who provide Claims-Made coverage required to also provide Tail coverage?
No. While agencies that provide Claims-Made coverage should also accrue funds to purchase the tail coverage, they are not required to do so. Likewise, agencies that do accrue the necessary funds are not required to actually purchase the tail coverage. As proof a tail is being fully funded, request a letter from the insurance company itself, or from a financial institution stating the tail is fully funded and they are holding the funds for payment, if requested. Do not accept a letter from the locum tenens agency or the insurance agent or broker.

As a locum tenens provider, what changes can I expect when working with an agency?
Depending on which agency a locum tenens provider works with, there is the possibility of providing services under Claims-Made coverage; the possibility that the agency may not be able to operate in all fifty states; and the possibility of lower compensation rates in order to cover the increased cost of the new coverage.

As a locum tenens provider, what questions should I ask the agencies I work with?
Important questions to ask are:

  • Who is you malpractice carrier?
  • What form of coverage does the agency offer? If it's Claims-Made, is the agency fully accrued for the tail?
  • Is the insurance carrier licensed and admitted in all fifty states?
  • Is the agency's malpractice policy written on a consent to settle basis?
  • If the carrier is not Medical Protective, St. Paul, or Evanston, then who is the carrier, and what are they known for writing (auto, homeowners, malpractice?)?
  • Who was the agency's previous carrier? If it was Western Indemnity/Galltney Group/H.I.S., then ask how they handled the past acts of coverage.