Deciphering who covers your tail
Gallagher Healthcare :: Industry Insights
By Gallagher Healthcare | 7/31/2013Leaving a group and joining another?
When it comes down to who is responsible for purchasing your medical malpractice insurance tail when you are leaving a group should always be discussed and agreed upon in a contract at the beginning of your employment. If this was not previously addressed then there are different situations that can arise, each one depending on either the group you are leaving or if you are joining a new group. One way that can happen is that you end up having to pay for your tail if both, the group you have left or the group you are switching to refuse to purchase it on your behalf. The next could be if that you do not feel that you need to tail, but your old group does not feel comfortable having a period of no coverage then they would end up buying it. Another outcome is that the new group agrees to pay percentages of your tail, but depending on the number of years that you keep practicing with them. For instance, a new group could make a deal with you that if you leave after the first year then you must pay for your own tail, after two years then you would both split the costs, and if you stay with them for three or more then they cover all of the costs. These are all possible to happen; it just depends on who has more leverage in the situation.
Additional outcomes are solely determined by the new group you are about to join. In one situation, they will require you to pick up the tail from your previous carrier because even if you have a free claims history; groups do not want the risk of exposing themselves to any possible claims that can emerge from your prior practices. On the other hand, your new group could offer you Prior Acts coverage in their current medical malpractice insurance policy. This would be ideal for you because the cost of purchasing long lasting coverage has been transferred to your new practicing group. By having an entire group under one carrier provides a unified defense against any claims rather than a divided front of finger pointing at different carriers on who is responsible for the payments. No matter which situation happens, always having medical malpractice coverage is crucial because it is better to have the protection if a claim ever comes around than have to suffer the consequences.