This is part one of our blog about when a physician decides not to purchase or continue medical liability insurance. Most physicians realize the importance of having continuous coverage and rarely do physicians in Michigan practice without medical malpractice insurance.
If a physician decides to go bare and no longer pay for medical malpractice insurance the first and most costly consequence is the gap in coverage. They will only have a gap in coverage if they have a straight claims-made policy. They will be ok if they have an occurrence policy or a modified claims-made policy. For example, if a physician has a claims-made policy with a retroactive date of July 1, 1999 and they let their policy lapse on July 1, 2009 they will have a 10 year period with no medical malpractice insurance coverage. This is assuming that they do not purchase tail coverage or get priors acts coverage from a new carrier. If a claim is filled on July 2, 2009 for an incident that happened on July 10, 2002 the physician will have no medical malpractice insurance coverage. They will have to pay out of pocket for all costs including defense and any settlement. Any claim filed after July 1, 2009 for an incident between July 1, 1999 and July 1, 2009 will not be covered by the insurance company. It is as if the physician never had insurance. As a physician there are ways to protect yourself if you know you can no longer afford your insurance. We will save those details for a later blog.
Part two will be posted shortly.