Med Mal Coverage Questions to Ask Before You Start a New Job
Congratulations on your new position! Before you sign the contract and start working, it’s essential to set yourself up for success and ask the right questions. Among the most overlooked (and most expensive) issues to address is medical malpractice insurance coverage.
Many providers assume coverage will be taken care of by the employer. But there are a multitude of factors that can lead to major coverage gaps and unexpected costs. If you’re evaluating a new opportunity, these are some of the most important questions to ask before starting a new job when it comes to med mal coverage.
We’ll cover what to know when accepting a new medical job, including the difference between claims-made and occurrence policies, who pays for tail coverage, how coverage limits are structured, consent to settle provisions, common exclusions, whether you should keep your own policy, and why the insurance carrier’s financial strength matters. These are the core questions physicians should ask when accepting a new job to protect their license, reputation, and long-term career.
What to Know When Accepting a New Medical Job: Start with the Policy Type
One of the first questions physicians should ask when accepting a new job is what type of policy is being offered. Most medical malpractice insurance policies fall into one of two categories: claims-made and occurrence.
Claims-made is more common and cheaper than occurrence. This coverage only responds to claims if the policy is active when the claim is filed. To avoid gaps, claims-made coverage requires that you purchase tail when you leave a job or obtain prior acts coverage on your next policy.
Occurrence coverage responds to incidents that occur during the policy period, regardless of when the claim is filed. Occurrence is usually about 2-3 times more expensive than claims-made coverage and is often more difficult to obtain (or even impossible for some designations in certain states).
Questions to Ask About Med Mal Coverage: Who Pays for Tail?
If the policy is claims-made, your next question should be: Who pays for tail coverage when I leave?
Tail coverage can be a massive expense – think six figures depending on specialty. Without it, you will have a gap in coverage and may be declined or surcharged by future insurance carriers. We always encourage providers to clarify:
Is tail coverage required when I leave?
Who pays for it?
Am I obligated to stay employed for a certain period if you pay for tail?
How many years of tail coverage is available from the carrier and how many are required to be purchased? This can range from one year to lifetime.
Does the contract specify answers to all the above in writing?
What are the coverage limits?
Another key item on the list of questions to ask before starting a new job is how the policy limits are structured and if they’re adequate.
You’ll want to know:
What the per-claim and aggregate limits are.
Whether the limits meet hospital or other mandated requirements.
If the limits are shared or separate. Do you have your own set of limits solely for you if you’re sued? Or are you sharing limits with the entity and/or other providers?
If your limits match that of everyone else including the employer. Everyone having the same set of limits ensures no one is a bigger target.
Can I keep my own med mal policy?
If you already have your own med mal insurance policy, it may be more advantageous to keep it rather than transition to an employer’s. Here’s why:
You won’t have to purchase tail upon canceling your coverage to join theirs.
You’ll remain the first named insured, meaning you have all the rights under that policy. You can make changes as you wish and have unlimited access to policy information.
You won’t have to forfeit any incentives you’ve been working towards like free retirement tail or payouts.
You aren’t limited to work on behalf of the employer for coverage to apply.
Do I have Consent to Settle with this coverage?
There are three main ways Consent to Settle is defined: full consent, hammer, and no consent.
Full Consent: This requires that written consent be obtained by the provider to settle. If consent to settle is withheld, a settlement cannot be awarded.
Hammer Clause: Consent is allowed to be withheld but the insurance company will only pay up to the amount that could have been settled. The company essentially “hammers” consent since the alternative can be a hefty price tag. (For example, if a settlement of $850k is rejected and a jury award $1M, the provider is liable for the $150k difference between what the company could have paid at the time of settlement and what is now due. The provider is also sometimes on the hook for the additional legal fees incurred after the time of the rejected settlement offer.)
No Consent: The company can and will settle any claim at its sole discretion.
Are there any exclusions I should be aware of?
Be sure you understand the scope of your role and that there’s coverage to match. There may be some policy exclusions in place that leave you unprotected. Common exclusions include:
Certain procedures or medications
Physical locations, types of facilities, or states
Telemedicine services
Administrative medicine
Any work performed outside your employment agreement
If you plan to do any outside work, know that coverage more than likely isn’t there. Side gigs, moonlighting, locum tenens work, and medical directorships often require separate coverage that isn’t afforded by your employer.
Who is the insurance company?
Don’t forget to ask who is actually writing the med mal policy. Ideally, you want to be with an admitted carrier with a strong financial rating that specializes in med mal insurance specifically. Look out for RRGs (with a few exceptions – those backed by powerhouse insurance companies are generally safe) and non-admitted carriers if an admitted alternative is available. If it’s too good to be true, it probably is.
Understanding the questions to ask before starting a new job goes beyond salary and paid time off. Medical malpractice coverage is critical for protecting you and your reputation.
Before signing any contract, take the time to review the policy—or have us take a look. Asking the right questions now can prevent costly mistakes and protect your career long after you’ve moved on from this new role.