Policyholder Services

MPL insurance for young ophthalmologists

KIMBERLY WYNKOOP, OMIC Senior Legal Counsel

As a new doctor, you probably know that you need medical professional liability insurance (MPLI), but you may not feel like you know enough about it to make a responsible decision. This article seeks to explain MPLI and the basics of OMIC’s coverage.

MPLI covers you for claims made against you based on your treatment of patients. These can be lawsuits or even just written demands for money due to an adverse outcome. Your insurer coordinates and pays for your legal defense (generally in addition to your limits of liability) as well as pays settlement or verdict amounts within your policy limits. MPLI does not cover many possible losses, such as damage to your premises, office theft, lawsuits against you by employees, or worker’s compensation claims. Depending on your needs, you may require general liability, property, employment practices liability, worker’s compensation, or other insurance. MPLI also does not generally cover slip and fall claims (unless they are due to patient treatment), products liability, or intentional acts. Therefore, it is imperative to read your policy and understand what is and is not covered.

You may not be aware of additional benefits your policy provides. For example, your full limits of liability with OMIC include MPLI for employees and your work on professional committees. A sublimit of $50,000 covers injury to others or their property on premises you own or maintain. Additionally, you have $100,000 in broad regulatory protection and eMD coverage for proceedings based on, e.g., HIPAA violations, billing errors, and credentialing. Your policy also provides $25,000 in defense coverage for regulatory agency disciplinary proceedings.

Knowing what is covered, your next concern may be cost. OMIC’s policy is a claims made and reported policy. This means that the policy covers you if a claim is made against you and you report it to OMIC during your policy period (a one-year coverage period) and the claim is based on an incident that occurred on or after your retroactive date. The cost for a claims made policy takes into consideration that the policy covers claims based on all incidents back to the retroactive date, not just incidents occurring during the policy period. If your retroactive date is the same as your policy inception date, the policy is covering incidents only going back one year. Since patients usually wait one or more years from the date of an incident to make a claim, you likely won’t report any claims to OMIC in your first year. Therefore, your premium is at its lowest level or “first step” rate. The rates go up each of the next four years as an additional year of incidents is covered under the policy. After five years, virtually all claims arising from services rendered during the first year will have been reported. Because the exposure levels off, the policy is considered “mature” and there are no further increased rating steps, even though the retroactive period continues to grow longer.

In addition to the lower premium new doctors experience due to step rating, OMIC offers significant premium discounts to new doctors. Physicians in their first, second, third, and fourth years of private practice following residency, fellowship, or military service receive a 75%, 50%, 25%, and 10% premium discount, respectively.

New doctors may also earn a risk management discount for participating in an OMIC risk management program. These discounts range from 5% to 10% depending on whether the doctor is a member of a state or subspecialty society with an OMIC cooperative venture.

You may also be wondering what happens to your insurance as you move from one practice to another, from group to solo practice (or vice versa), or from one state to another. OMIC’s coverage is easily portable and your underwriter can assist you with these changes. If you practice solo, you will simply have your own policy. If you join a group that is already insured with OMIC, you will likely be added to the group policy. You will have your own retroactive date and liability limits and you may have endorsements applicable to you individually. You may join a group, though, whose members each maintain their own separate MPLI. If this is the case, you will have an individual policy with OMIC. You will want to ensure that the group’s business entity has coverage since it won’t be listed on your Declarations page. If you create a sole shareholder corporation for your practice activities, you will want to apply to add this entity to your individual or group policy. While separate limits are available to sole shareholder corporations, most share limits with the physician owner.

If you move from one OMIC policy to another, you will generally keep the same retroactive date and your coverage will be seamless. If you switch insurance carriers to OMIC from an occurrence policy (one that covers claims that occur during the policy period regardless of when the claim is made and reported), you will not need an extended reporting period (“tail”) endorsement from the prior carrier. You will join OMIC at a step one rate since your retroactive date will coincide with your original inception date. If your prior policy was claims made, you can either purchase a tail from the prior carrier to cover claims based on incidents that occurred while it insured you or you can buy prior acts coverage from OMIC.