Med Mal 101 for Advanced Practice Clinicians

Understanding Tail Coverage, Vicarious Liability, and Malpractice Insurance: A Healthcare Provider’s Guide

This transcript is from a live webinar hosted by L&J Insurance, where Mike Karson breaks down key concepts in malpractice insurance, tail coverage, entity coverage, and more. It’s designed to help healthcare providers understand their options and avoid costly pitfalls. Edited for clarity.

Mike Karson: Hi, my name's Mike Karson and I am a broker here at L&J Insurance Services. Today we're going to be tackling Med 101 for APCs, Advanced Practice Clinicians. This is an area that has really taken flight in the last few years and we wanted to make sure that we had some information out there to cover any questions you might have or any concerns you might have about whether or not you're adequately covered — or even to answer some questions that you might not even have known you had before you had 'em.

Here's what we're gonna be tackling today: the idea of policy structures. The solo versus employer coverage. A lot of you will have solo policies. We wanna make sure that there's adequate coverage with no gaps. Even if you have employer coverage, there's opportunities for gaps. There's always a way that you can find a hole in coverage if you look hard enough and long enough. [00:01:00] And unfortunately, our experience is that plaintiff's attorneys have gotten very, very, very good at finding holes and gaps and exploiting them.

One of the things that we get asked about almost all the time is tail coverage. How does it work? When do I need it? Why would I want it? What does it do? We'll go through all of that.

Premiums and discounts are going to be of utmost concern to you because cashflow is always an issue no matter what the size of your individual practice or corporation — we always wanna make sure that you're being taken care of.

Common Pitfalls and Employer Transparency

Common pitfalls are more about the thing that I just mentioned — the idea of questions you didn't know you had until it maybe is sometimes too late.

Other coverages is something we're also gonna be getting into. One of those places where you just need to have a heads-up because again, those same plaintiff's attorneys are not just limiting themselves to what they can do
[00:02:00] to sue successfully on a malpractice claim. There are a million other ways that, in our current legal environment, healthcare practitioners are exposed.

The issue that we're going to do today is: why use a broker? Why use a guy like me? Why would you want to use a broker? What are the benefits? What are the trade-offs?

Let's get started. And at any time if there's any questions, you can either stop me or there's always gonna be at the bottom of the page there — hello@custommedmal.com. Reach out. We're happy to have one-on-one conversations, whatever makes the most sense for you.

Okay. Policy structure. There's really two types of insurance policies that we're gonna be looking at. One is occurrence, the other is claims made.

The way that I always like to kind of provide a crib note on this is: occurrence is what you would have on your car. When a claim occurs
[00:03:00] on your car — you know, you have an accident — it automatically triggers coverage. Everybody knows when the accident occurred, more or less. Who did what and how much it cost is a matter for the insurance company to figure out, but everybody knows exactly when the claim occurred. It’s also very expensive as compared to claims made.

I'll get into why claims made is a little bit less expensive in a second. The rule of thumb is two to three times more expensive than occurrence coverage. Its availability varies state to state, but it's typically more available, more common, and it's truly the most common kind of insurance in the professional liability healthcare arena.

Claims made is a little trickier. And the best way to think about claims made is in terms of when the policy is going to be kicking in for coverage.

If a patient comes in in January and
[00:04:00] is sent out for labs, doesn't go for the labs, comes back in March with the same complaint, doesn't go to the labs again, and then finally in June does go to the labs — the labs come back with a flag, and the patient says, “Delayed diagnosis, I’m gonna sue.” When did the claim occur?

You’ve got no idea which date was the triggering event. To make it more complicated, you changed insurance companies in April. Does it go back to the first company that was there when the patient first came across your door in January? Or does it go to the carrier that you have now?

Claims made has triggers and methods in which to diagnose how that is to be handled, and for that reason, it's significantly more complex.

We would have something called a retroactive date. The retroactive date would cover everything that was happening subsequent to that date. The new carrier should allow
[00:05:00] for that prior acts coverage — or retroactive coverage — back to that original retro date. So the answer almost certainly would be that the claim would be reported to the carrier that you have now.

That's one of the things — and we'll get into it later — but that's a benefit of having a broker. That kind of goofball, screwball scenario that I just laid out is second nature to us.

We ask all the right questions. We want to make sure that we have you taken care of, start to finish. So one of the issues that differentiates tail coverage from many of the other questions that we have is that it absolutely makes no sense. So let's go through it together. By the way, with occurrence, no need for tail. The tail coverage is only required under claims made. This is why it's significantly less. Remember, that's significantly less. So claims made coverage ends. We'll have a policy that ends, let's say on July 1, and it has coverage back to July 1 five years ago. Well, every single patient you've seen from July 1 five years ago to July 1 of this year is possibly out talking to a lawyer right here, right now. You don't know it. Everything seems to be okay to you. They have not made their claim yet. They're still talking to the attorney, and it might take a year for a really, really super complicated case to come to your consciousness when they get that written demand letter. It could be a year or more since you saw the patient last. So if the policy ends on 7/1 and you get this letter 9/1, what do you do?

Tail Coverage Explained

With tail coverage—tail, the technical name for tail is extended reporting period. It's important that you remember that because all it is is you're buying a longer period of time to report claims that happened under this old policy. So we have now purchased, in most cases, a lifetime or an indefinite tail, and that allows you to go back and report claims that happened under an expired policy to the carrier that was last your insured company. So the tail, the rule of thumb on tail is, and we'll get into it a little bit more, is two to three times expired premium. So that's where the cost really comes up to being almost on par with occurrence. It's very, very expensive. So we'll get into tail coverage a little bit more later, but I wanted to spend a little bit of time kind of laying the groundwork for that.

Alright. Claims made step factors. Year one is going to be incredibly affordable, the least premium that you're going to pay ever in your lifetime. Now, if you're brand new to practice, they also have new-to-practice discounts. So you'll get, in some cases, a 75% discount on the very least expensive year, which is year one. So if your policy premium in year one is a thousand dollars and you get a 75% discount, you are almost certainly going to pay more for your car insurance in year one than you would for your
[00:08:00] malpractice insurance. Year two, the number of patient encounters that you have will double, and we already talked about the idea of super complex cases taking at least a year to actually come to your consciousness, to be presented to you. So the likelihood of you being successfully sued in that first year is really nil. So it's almost a gimme year for the insurance company. They don't really know what kind of a practitioner or what kind of a risk you are until that second year when all those chickens from year one come to roost. The premium will jump double year one to year two. And it'll go up every year, not nearly as dramatically as it does between year one and year two, but it'll go up every year for five years, and then it'll hit what's called maturity. Once that hits maturity, it flattens out. It hits a plateau. The premium will only then be affected by a total rate change by the insurance company, or if you have certain credits, a loss-free credit or discount. We'll get into those in

[00:09:00] a. Claims made step factors. It's important to remember, it's almost like getting onto or getting off of a freeway. Year one, you go slow, you pay less, and then by year five, you're zipping along in the fast lane doing 80. So that's the year when you're going to be making the most money and you're going to be making the most premium payment, because all of that risk for those first five years will all be considered added into that policy's premium. You'll be what's called mature and the rate will be commensurate with the amount of exposure the insurance company assigns to your policy.

Let's take a quick shift. There's two kinds of coverage we talked about, whether your employer provides it to you as part of your employment, or if you're a 1099 independent contractor or you have some other kind of a situation—locums or whatever it is that you bring to the table—you might have a policy for you alone, your own personal policy.
[00:10:00] So what's the difference? What makes the difference? In insurance, we have something called first named insured. So the first named insured would be, a solo policy would be you. You would be the first named insured. You're the one writing the check. You're the person who has the policy in their name. If it's your employer, it would be ABC Medical Clinic or whatever the name of the entity is. If you are the first named insured, you have all of the rights. You can cancel it. You can change the location. You can change the limits.

You can change anything you need to within a certain number of parameters. If it's ABC Clinic and you're not the owner of ABC Clinic, you have no rights. You can't confirm coverage is in place. You can't request loss histories. You can't request anything because it's the same as walking into a bank and saying, I'd like to know how much is in my boss's account. They're going to laugh you right out of the place. So it's important to know the differences. It's all about control now. Control costs.
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If your employer gets it to you and doesn't pay you to get your own, or you don't have to get your own, the employer has all the rights. They have all the control. They have all the power. They also have all the expense. If you pay for it yourself, you get a significant upgrade in the amount of power and control that you've got, meaning zero to a hundred, but you have to write the check for that.

Shared vs. Separate Limits

We have a couple of things that matter in how an employer-specific policy is structured. So let's look at the idea of shared versus separate limits. This is going to be more important to those who are on the employer-employee contract relationship. Shared versus separate limits—these vary state to state, so always keep that in mind. But primarily, kind of a general rule of thumb or a general accepted understanding is 1 million/3 million. $1 million per claim,
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and then $3 million in the aggregate. So on any one claim, the insurance company will pay out a million dollars maximum, and in any one policy year, they'll pay out a maximum of $3 million. That can be five $600,000 claims, or it can be three $1 million claims, but the maximum they'll pay out is $3 million.

Shared limits in this case would be you and any of the other folks—the APCs that are on that same policy—could potentially be sharing limits with ABC Medical Clinic. That means you could have maybe five or six different practitioners and the entity all sharing the same pool of 1 million/3 million. It's conceivable that in a catastrophic year you could blow through that $3 million aggregate.

If you have individual limits—surprise, surprise—it costs more. Think of it as buckets. Everybody has their own 1 million/3 million bucket.
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In this case, there would be six for the APCs, six individual ones, and then one more for the entity. So in any kind of a lawsuit situation where you would have multiple employees in multiple lawsuits, the chances of exhausting $18 million—or in this case when we have six plus one, it would be $21 million worth of limits—it's not very high. The chances of that happening are low, but the exposure to the insurance company, they have to deal with it the same way. The potential loss is 21 million, so it's going to be significantly more expensive than shared limits. We always encourage you to have separate limits if at all possible, but it's not always possible.

And circle back to the first conversation we had about this, which is if you're not the first named insured, you don't get to vote. So really, you're ceding a ton of control to your employer to make sure that you're covered adequately—both
[00:14:00] in policy structure and in limit structure.

Moonlighting and Coverage Gaps

So a separate concept here under what's the better fit for you—solo or employer coverage—is moonlighting. Think about moonlighting in this way: the minute you leave the front door of your employer's premises, your coverage stops. Your coverage stays there in that entity, in that building. Even though you've left, if you go across town and work at another place, you need to get coverage from there. If you don't, you're not insured for that activity. You have no policy that follows you.

Moonlighting and Coverage Gaps

Under a solo policy, that policy follows you wherever you go, whatever you do. There are some caveats to that. We always want to make sure that you're notifying the carrier and you're always up to speed with keeping them current on where you are so that everybody agrees that everything you do is insured.
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But moonlighting is super critical because we assume at times that the company has a policy, you are working, therefore it's okay. This is just like a side hustle. If the company is not paying you for that activity, if it's not during the course and scope of your employment with that company, there is no coverage. You need to make sure you individually are covered for anything you're doing at all times that is not in the course and scope of employment under that employment agreement.

Tail Coverage Explained

So potential gaps. Let's see. Because you're in the employee relationship or in that employee role, you've given up the right to being first named insured, which isn't always a bad thing, but it means that you are ceding a ton of control, ceding a ton of faith over to the employer to take care of things. First of all, you don't know if the premium's paid. They might be having a really bad time. They [00:16:00] might have a super inefficient front office. Coverage might not actually be paid for. If you leave, you have to be sure that tail coverage is purchased for you under certain circumstances. We want to make sure that that's in place. That's super critical, because even if you were employed and insured there at that time, and you leave and the tail is not adequately taken care of, it would be like you never had insurance.

And then the last thing that we see a lot—we get calls six months, sometimes a year after somebody starts—and they say, oh yeah, we hired this person but we forgot. We forgot to tell you. Can you just get them covered? Well, I can get you covered today for sure. I don't know that I can go back six months, 12 months, 18 months sometimes, and get you the coverage you need. So giving up that control—you want to make sure that you're in an employment relationship with somebody that is running a really, really tight ship and doing things the right way. [00:17:00] Asking questions is your friend.

Tail Coverage Explained

Let's circle back to tail. Tail is, honestly, the reason I was able to put my kids through college—because it's so confusing. It is so counterintuitive. It doesn't make any sense. So you have a policy and you pay year after year. You pay for this policy without fail and then you decide, okay, that's it. I'm going to hang this up and I want to go make craft beer. I don't want to have anything to do with healthcare ever again. No problem.

Well, you would have to buy tail. The number one question I get all the time is, no, no, I already paid. You don't understand—I already paid. Sure, you paid for the policy while it was in place. But now you have to pay to seal off that mine. You have to pay to seal off all of those years of exposure that you had as a practitioner. You pay once, now you have to pay again. It's confusing, it's strange, it's abnormal.

The best way that I can explain it [00:18:00] is think of it as alimony. If you're married, you don't need alimony. You don't pay alimony to your current spouse. If you get a divorce—if something in your situation changes—then you have to pay alimony. You don't pay alimony if the policy's in place because you're not buying a tail policy. What you're buying is a longer period of time to report claims that happened under that old policy. You're buying what's called an extended reporting period endorsement. It's just a modification of that policy that is now expired to say that the policy period goes on—usually in this class of risk—in perpetuity.

Okay. So when do we purchase this? Again, think of the idea of alimony and divorce. Anytime you cancel the policy—you guys separate, you're going to get a divorce—that's when you need to start thinking about alimony. If you're doing fine, you're happy, and everybody's okay, the policy continues to roll. There's no need to talk about a divorce. [00:19:00]
Terminating a set of limits—this happens every once in a while where somebody says, "Hey, I'm not doing this high-risk or kind of oddball deal anymore," or "I'm starting to do higher-risk or much higher exposure inclusion into my practice profile." You need to bump up your limits or you need to increase. Anytime there's a significant change in the policy structure, in terms of limits, we have to make sure that that is accounted for in the premium cost, and we have to always be in communication with the insurance company.

Why You Need a Broker

That's another reason—sneaky spoiler alert—that's why you need a broker. You need somebody who's got this kind of thing wired and will take care of it for you.

Another thing that happens is someone buys a new machine because it's going to revolutionize cash flow in their practice. It’s going to triple their patient population—and then they find out that it was a total dud. Nobody came through the door and it’s just a time, money, and energy sink. You want to get rid of it. You want to cap off that exposure. Anybody that you saw and used that machine on—you want to just terminate that. [00:20:00] Think of it as sealing off a silver mine with a bunch of pollution in it. You just want to blow up the front of it. You pay to get the tail, and you seal it off. It won’t encroach into what you’re doing now. It's gone and sealed up forever.

Okay. Pricing and deadlines—we already talked about this: roughly two to three times. That's back-of-the-envelope math. So if you're paying $5,000 for your current policy, easy math—it'd be 10 or 15. That’s a safe way to look at it for budgeting.

Almost always, the insurance company does not want you to buy this because you're sealing off the cash flow to them, and they’re taking on a lifetime of exposure. They don’t want you to buy it—which means you definitely want to buy it. Rule of thumb: anytime the insurance company says, “We’d prefer you didn’t do this,” you want to be in with both feet first.

There’s a strict—new or not—you want to treat it this way, a strict 30-day deadline to have your check in their hands. Not to opt for it—to have your check in their hands. [00:21:00] Thirty days. Don’t ever let it go down on you without having that executed. Another way a broker is your friend.

Payment is due in full. This is different now. You used to be able to pay in quarterly installments. Now, one of the other obstacles to this is that you have to pay the 10 to 15 upfront, in cash, right now. You probably can charge it on your credit card, but it’s not going to be something that you negotiate with the current carrier to pay over a period of time—because it’s not a policy.

If the policy is canceled, that is what's called fully earned. Meaning once you put that money on the table, it’s just like putting it on the table in Vegas. It goes away. It is no longer your money. Once it's on the table, you can't touch [00:22:00] it. It’s gone. Even if you change your mind two days later, it’s gone. That’s the deal.

Okay. How do we view the idea of running the risk of not buying the tail? Frankly, it's a business decision. I have this conversation all the time with physicians and healthcare practitioners who say, “No, no, I run a super clean shop. My patients are thrilled.” I understand. Everybody strives for excellence and perfection in the practice of healthcare, but it’s the practice of healthcare. You’re dealing with humans. Sometimes humans are greedy. Sometimes humans are disloyal. Sometimes humans are shaken by the idea of how much money they can make if they sue—whether or not there’s really a viable reason to sue or not.

One of the things you also need to remember is that the real cost of insurance payoffs very rarely is the indemnity. Most insurance companies are running somewhere around [00:23:00] 85% closure on cases with no indemnity—none, not one penny paid out to the plaintiff. The real cost, the real burn, is the $50,000, $60,000, $70,000, $80,000 that they have to pay the attorneys to get the other party to drop and run.

So you might not feel like, “Hey, I’ve got anything that I truly did wrong here,” but you still have to pay for the wolves to be beaten away from your front door. That’s the sneaky cost of it.

Okay. So if you don’t buy tail insurance, you’re going to have a gap in coverage. That same scenario we went through earlier—where you went for five years, July 1 to July 1—that’s not going to be insured. It’ll be like you never had insurance, even though you paid for it at the time. It’s never going to be insured. So you are going to have a situation where you have a gap.

Carriers are very, very scared by that. You’re seen as a maverick, a risk-taker, somebody who doesn’t [00:24:00] care about the rules. The last thing they want to do is put a million dollars next to somebody who’s a gambler. You're going to be assigned, at a minimum, a debit by a new carrier when you try to go into a new company because they’re going to see you as a guy—or a girl—who is loaded with red flags. They don’t want it.

They don't want it, and you will have to pay extra for the privilege. So what can you do? When you're talking to your prospective employer or the person you're looking to contract with, you can ask for a signing bonus to offset the tail costs. You can ask the employer to negotiate on the way in that they'll pay the tail when you leave. Or you can keep your solo policy.

Tail Coverage Explained

Remember, divorce means alimony. Termination means tail. If you don't terminate the policy, you can carry it on and keep going to the next one. You can go down to part-time coverage. It's not a direct half-premium reduction, but it would be less. And it's a way to continue [00:25:00] to extend that policy, which is essentially what tail is. Tail is really just an extension of your existing policy. So as long as the policy doesn't terminate, you don't need to buy tail.

Death, Disability, and Retirement (DDNR)

Quickly—what's D-D-N-R? D-D-N-R is death, disability, and retirement. That's the three ways you get free tail from an insurance company. Retirement is defined by an insurance company as essentially: I don’t get paid to be a healthcare professional anymore. I'm not paid for my licensure. If a dope like me can go out and do the job, that's okay. You can go do that job. If I can’t get the job because I’m not licensed, you can’t either—according to DDNR rules.

Prioritizing, particularly at certain stages of your retirement or in life, for DDNR is a priority. Not everybody offers it. You want to make sure it’s in there. Another spoiler alert—that’s what a broker does for you: takes care of making sure all of that is in place.

How Premiums Are Determined

How premium is determined: where you are, who you are, what you do, and how many people you see. [00:26:00] Obviously, someone in a really high-risk area—Cook County, Miami, New York City, Los Angeles—is going to pay more than someone in Ames, Iowa. How long have you been doing it? What’s your credentialing? All of those things matter. There's a million ways that premium is determined and we could spend hours talking just about insurance accounting.

Right now there's a marketplace cycle. Think of it the same way as real estate or the stock market. Right now we're in what's called a hard market cycle. You could argue it's not showing up as ferociously as in past years, but it's a true seller's market. The insurance company offers take-it-or-leave-it policy solutions. Your job is to navigate and negotiate as
[00:27:00] best you can. Again, why you need a broker is to help you navigate and negotiate. But ultimately, you're really up against it as a buyer—it’s basically take it or leave it.

Right now, there are higher premiums, restricted coverage, fewer freebies. For instance, one of the things we've seen dial way back is cyber liability insurance included as what's called a supplement. We'll get to that in a second. The insurance marketplace is generally harder, but as APCs, there's a lot of people who are really thirsty for your premium dollars. We can use that to maximum effect when it comes time to negotiate with companies.

Common Pitfalls and Employer Transparency

Common pitfalls: one, you don't call us in time. You call us too late. Coverage is already canceled. You're already past that 30-day magical window. You started a job weeks ago and just figured out you were supposed to call us. We understand—this is our daily air, breathing, water, drink—but not yours. This isn’t where you live. We get it. Do your best. Always reach out to us first. Always put in contact with us first. Help us plan your next move so you don't make a mistake.
[00:28:00] Employer transparency is a problem because each employer is not going to be interested in sharing how much premium they’re paying. They’re probably not going to be interested in sharing who their insurance company is. There are a lot of things they’re not going to want to give you because they don’t feel it’s their obligation to—and a lot of times, they’re right. We still want to do everything we can to protect you. Make us your ally. Allow us to help you as best we can.

Gaps: there are a certain number of times we get a call where a physician or a practice administrator or a healthcare provider says, “I thought I was insured for that,” or, “I felt certain I was insured for that—it felt just like this other thing I’d been doing before.” There are a lot of times that insurance companies—just because something is legal—doesn’t mean that it’s insurable.

It’s legal for me to drive 55 mph in the snow or rain. But it's not necessarily insurable. It’s not the greatest risk they’d want to take on. And if I was doing that all the time, they’d think very carefully about it. It’s not illegal to give a 16-year-old a Ferrari. Doesn’t mean they’re a good risk. [00:29:00] There are a lot of things that are legal but not necessarily insurable or preferred risks. So make sure you give us a call.

Subpar carriers: we have admitted versus not admitted. We have RRGs. There’s an alphabet soup of ways this can bite you and hurt you. You need to be in touch with a broker. I'm sorry—we're having a lot of trouble keeping you up to speed. I took too long in the beginning. I apologize. But feel free to reach out and give me a call.

Admitted versus not admitted is another carrier question we could talk about for hours. We get these questions all the time. Admitted is better than not admitted, when it's possible. RRGs are dangerous—except when they’re done properly. We know who's who. We know why they're dangerous and we’re happy to explain it to you.

Dangerous is a word I don’t use lightly. Sometimes it can be really disadvantageous to be with an RRG—but we know which are the good ones and which you want to go with.
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One of the quick ways to check with your carrier is to check out the AM Best rating. It’s essentially a credit rating or viability rating for insurance companies.

One of the things that's coming up more and more now is marketplace opportunities. If you’ve been with the same insurance company your entire career, many new insurance companies are putting together fantastic coverages at super competitive rates—because you and your demographic are very profitable to them, and they desperately want your insurance money. They want to be in your cash flow. So take advantage of it. Allow them to fight for your premium dollars. Allow them to slice their own throat so that you get better opportunities.

One of the problems we run into is non-renewals, surcharges, and elimination of coverages. We already talked about the 16-year-old with a Ferrari, for instance. Insurance is not static—it changes all the time within a very limited paradox. We have the ability to keep track of who’s hot in the marketplace, who’s really doing well, who’s severely cutting and limiting coverage, who’s trying to get out of the market, who’s for sale. [00:31:00] Get in touch with us. We’re happy to help you. That’s another reason why you need a broker.

So these are places—these other coverages—cyber, EPLI, entity coverage. I want to spend a little bit of time on NVL.

Cyber: believe it or not, you need it. You need it. It has actually eclipsed medical malpractice in payouts. In just the last few years, they pay out more money for cyber than they do for medical malpractice now. Because with cyber liability, the cost is not necessarily paying victims—it’s paying for remediation. The remediation for cyber exposures is staggering. It’s knee-buckling. What you have to do immediately after a cyber intrusion—it is mind-blowing how expensive that is. And you are ultimately responsible. If your laptop gets stolen, you were the one charged with protecting it. Ultimately, it’s your responsibility. [00:32:00] There are a lot of different aspects to that, but you are more exposed than you think. This is one of the real pitfalls—one of the places where you really need expert guidance. You’re far more exposed than you think.

We had a client who had their backup stolen. He was a cosmetic surgeon and he had before-and-after pictures of every single one of his clients. A hard drive was stolen from the office. That’s a cyber liability issue.

Employment practice—very quickly—is all the -isms: racism, sexism, ageism, ableism—anything contrary to what you're supposed to be doing as an employer. You need coverage for this as well. Again, the litigious nature of the attorneys in this realm will kill you. The defense costs will absolutely bury you, and that’s the point—to write the check and not fight. [00:33:00]

Entity coverage: one quick way to think about this is entity as a person. “Corporations are people, my friends.” —Mitt Romney. Corporations can be sued. It can be used to your advantage to have the entity policy in place. If you have a claim that comes in against you, an associated physician, and the entity, it’s possible for the entity to settle on their claims limit. Remember we talked about the individual limits? If the entity has their own limits, they can write a check for $800,000. None of it is attributed to you. None of it is attributed to the physician. Neither one of you has admitted culpability. Neither one of you is assigned fiscal responsibility. And the entity eats the charge.

It’s a strategy that is often used and can be very advantageous. You always want to make sure you have the same entity limits for you and the entity. Because if you’re half or twice as much, you’re suddenly far more attractive. If you have half as much, the entity is the one that’s going to get hit. So everybody should have the same levels, the same amounts.
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Understanding Vicarious Liability

Vicarious liability used to be one of those things insurance companies would just toss in. It was 10% of the total policy premium. So on a $10,000 policy, it’d be $1,000. Now what we're seeing is that those same attorneys are so smart and aggressive—they’re finding they can drive trucks through the holes in vicarious liability and really cash in.

So we’ve seen a lot of increase in VL claims. Anyone who has someone working for them that carries their own coverage needs VL. If I’m ABC Medical and I have a 1099 APC, I need vicarious liability for the acts they take on while they are [00:36:00]
under my roof. I, as a patient, come in and see ABC Medical Clinic on the door. I’m seen by Jane Jones, RN, LPN, LVN—I don’t care who writes their check or how the employment agreement is constructed. I was seen at ABC. I had an adverse outcome. I'm suing you and everyone you’ve ever met. You have to guard against that because you are obligated to respond for that provider’s behavior while in your clinic. Vicarious liability used to be nothing—now it’s really something.

Okay, let’s move on.

Why L&J is the broker you need. I’ve hit this a bit already. I’ve been doing this about 30 years. My folks started this business. L is Lily, J is Jack. My mom was an OR nurse—one of the OG battle-axes from back in the day. My dad worked for Hewlett-Packard. We would sit around the kitchen table and have sponge count conversations at dinner. We’d talk about thoracic surgeons and why they were better than neurosurgeons—or the other way around. [00:37:00]

It’s just the air we live and breathe. We are always focused on taking care of our caretakers. We look out for you. We are born to serve the healthcare provider. Your job is practicing medicine. Our job is making sure you're covered while you’re doing it.

I’m fortunate that my two adult daughters work with me. They’re my business partners—super capable, super passionate, and able to answer any questions you have. There’s only three of us. You can have my cell phone. You can have their cell phone. You can reach me at mike@custommedmal.com [00:38:00] 24/7. Knock yourself out—get in touch. We’ll answer any questions you have. That’s all we do—healthcare. And we write a couple things that help with healthcare. But this is it. This is all we do.

Our job is to fight with the insurance company for you. We know the questions you need answered. We know how to ask the insurance company. We know how to negotiate to get a “yes” out of a “no.” That’s what we do. We’re here to help you make informed decisions. Take advantage of us.

How can we help you? We can help you find coverage for a new policy. Change existing coverage to make sure it’s a better fit. Or, if you have a broker you’re not happy with—or a broker you don’t even know by name because they’ve hired 16 new account managers and you get routed to an 800-number pool and no one’s consistent—call us. We’re happy to help. We can take it over.

You’ll have one person. One phone call. One cell phone. First-name basis. We have a relationship with our accounts. We have a relationship with our clients. And we’d love to be in a relationship with you.
We can find everything else you need. We want to make sure you have all those complimentary coverages we talked about—cyber liability, vicarious liability. If you are the entity, we want to make sure you’re taken care of. We don’t want you to be surprised—and we don’t want to be the source of the surprise.

One more thing: send us everything you’ve got. If you're like every other healthcare provider I’ve ever talked to, there’s a folder somewhere with a bunch of bills, a policy, and certificates of insurance. Send it to me. Scan it. Email it. I’ll tell you what you’ve got. I’ll tell you if it’s current, if it’s not. If it’s adequate for what you’re doing. I’ll tell you what you need. Send it to hello@custommedmal.com or mike@custommedmal.com. We’ll take care of it. No problem.

We’re here to coach, take care of you, and represent you. We want to do that. Give us a call—see what happens.

Thank you. I know we’ve gone nine minutes and thirty-five seconds over. That’s our line. I’m Option One. Hannah’s Option Two. Faith is Option Three on our phone tree. But honestly, if you push any number, you’ll get one of us. That’s okay. Just reach out. Give us a call. Get in touch. Let’s see what we can do together.

Thank you so much for visiting with us today. If you’re seeing this after hours, don’t be afraid. Pick up the phone. We work Saturday. We work Sunday. We work all the time—because you work all the time. Get in touch. We’re happy to talk to you. Thank you again for your kind attention.