Guest Post – by Shawn M Johnson, ChFC®, CLU®, CLTC – Vice President of Business Development at Treloar & Heisel, our insurance partner

If you operate a medical or dental group or a medical (MSO) or dental support organization (DSO), periodically reviewing and potentially switching malpractice insurance carriers is a natural part of business growth. Below are seven key factors to consider before making the move to a new insurer.

(Note: Many of these points also apply to individual professional liability policies.)

1. Assess the Strength of the Insurance Carrier

Before diving into policy features and pricing, take time to research the insurer’s stability and reputation. Key factors to evaluate include:

• Size and financial ratings: Larger, financially sound companies often have more resources to fight claims.
• Experience and track record: How long has the insurer been in business? What’s their history of defending claims?
• Success rates: Check publicly available information about the insurer’s claim outcomes. Favor companies with a high percentage of cases closed without payment and strong trial win rates.

Remember, the cheapest option isn’t always the best value. Look for a carrier that delivers reliable protection and has a proven ability to defend its policyholders.

2. Understand Consent Clauses

A consent clause outlines your rights if a claim is brought against you. Can the insurance company decide if a claim should be settled, or do you have the final say in the matter?

Pure consent clauses require your written agreement before settling a claim, giving you maximum control. Some companies may not have pure consent and if there is a disagreement about how to move forward may use an arbitrator for a final decision. Other companies may suggest a settlement amount, then if you don’t agree to settle and lose the case in court, you pay anything over the amount they were willing to settle for originally.

Pure consent clauses provide the most control, but they’re not offered by every carrier. Be sure to read the fine print.

3. Know Your Policy Types

Malpractice policies typically fall into two categories:

• Occurrence policies: Cover claims regardless of when they’re made, as long as the event occurred during the policy period.
• Claims-made policies: Only cover claims reported while the policy is active. Coverage can be extended by purchasing a “tail” (extended reporting endorsement).

For group practices, things can get complex if members have different policy types. Aligning everyone under the same coverage type—such as transitioning from claims-made to occurrence—may require purchasing tails or retroactive coverage.

4. Align Group Policies

When aligning multiple doctors’ policies:

• Doctors with existing occurrence policies can simply switch to the new carrier.
• Doctors with claims-made policies may need to purchase tail coverage to protect past work. Alternatively, new policies with retroactive coverage can bridge gaps.
• Some doctors may resist changing their coverage, requiring careful negotiation to reach a group-wide solution.

Tail coverage can also help ensure claims related to previous treatment are handled by the prior insurer, protecting the integrity of the new policy.

5. Review Coverage Limits

Understand the per-claim and aggregate limits of your new policy. When switching carriers, consider increasing coverage to address potential risks. Additional coverage is often more affordable than expected. Also, review entity malpractice insurance to protect your practice if it’s named in a lawsuit.

6. Evaluate Ease of Business

Choose a carrier that simplifies your administrative workload. Key considerations include:

• Responsiveness to risk management questions
• Simplified billing for multiple doctors’ policies
• Positive experiences reported by your financial advisor or peers

7. Partner with an Experienced Financial Professional

An experienced advisor can provide tailored solutions to meet your group’s specific needs. Look for someone with expertise in helping medical/dental groups, MSOs, and DSOs navigate malpractice coverage and risk management. They should be equipped to handle urgent coverage needs, reduce administrative burdens, and support your long-term growth strategy.

Choosing a Malpractice Carrier

Switching malpractice insurance carriers requires careful evaluation and planning. By assessing the insurer’s strength, understanding policy details, and working with a knowledgeable advisor, you can secure coverage that aligns with your group’s needs and provides peace of mind.

Whatever you do, work with someone who understands the financial needs of doctors and their practices.

Speak with an insurance professional at Treloar & Heisel to see if whole life insurance could support your financial plan.

For financial assistance, connect with our team.