The Surprise You Don’t Want: Discovering Your Professional Liability Coverage Is Not Enough

“Surprise! Your insurance policy might not protect you from that lawsuit!”

It would be enough to ruin someone forever on the concept of surprises. A surprise for a birthday? Great. A lottery ticket? Fantastic. But in the case of a lawsuit? No, thank you.

To help keep surprises restricted to happy occasions, PRMS participated in a panel discussion at the 2008 American Psychiatric Association Annual Meeting titled, “How to Launch a Successful Private Practice.” The three-part series began with a discussion on obtaining proper professional liability insurance. Martin Tracy, JD, ARM, President and CEO of PRMS, began with the most important lesson he wanted to teach all psychiatrists:

“All practice policies are not the same. It’s a huge concept to learn.”

Tracy does not only know insurance, but he also knows psychiatrists. “I’ve spent twenty-five years talking to psychiatrists every day of my working life,” he told attendees. This combination has resulted in a unique insight into the professional liability needs of psychiatrists and how those needs differ from other medical specialties.

The only bad news Tracy gave attendees was that in order to select the best insurance possible you must invest time into reading policies, which don’t exactly top the New York Times bestseller lists. The reading may be boring and at times tedious, but it also is critical for any psychiatrist. “Unless you understand what you’re buying,” he said, “you might not have what you need.” Not having what you need leaves you susceptible to surprises down the road—very costly surprises.

To support his point, Tracy mentioned several things for psychiatrists to keep in mind while shopping for professional liability insurance:

• Occurrence versus Claims-made: These are two very different coverage options, and only you can decide which is best for you. “I can’t tell you what kind is good for you. It’s like walking up to a person on the street and asking them if they should buy a Mac or a PC. You can’t answer that question without asking twenty different questions first,” said Tracy.
• Consent to Settle: Some companies will settle a lawsuit without your consent. Know what the policy is regarding your consent to settle.
• Portability: Not all insurance companies are licensed to write in all states, creating a headache for you in case of a move.
• Details, details, details: Don’t assume that the company will cover everything that you need. “Insurance companies are free to pick and choose what risks they take on and whom they will insure,” said Tracy .

The good news is that with the investment of some time and reading, you can be an informed consumer and choose the coverage best suited for you. Tracy told attendees, “Companies should be able to provide you with a sample policy as you make your decision.” Ask for one, read it carefully, and leave the surprises for happy occasions.

--

The Psychiatrists’ Program offers the following materials to help you learn more about professional liability coverage and to choose the coverage that is best for you:

• Online Educational Center: This center features a free public tutorial titled, “Insurance 101”
• Administrative Defense Coverage: Malpractice suits aren’t the only reasons why you need good insurance coverage.
• Forensic Coverage: Psychiatrists are pursuing forensic work in ever increasing numbers, but not all insurance companies cover forensic work. (Includes an offer for a complimentary educational material.)
• Occurrence versus Claims-Made: Learn the differences between these types of coverage.
• Consent to Settle: Read The Psychiatrists’ Program’s policy on Consent to Settle. (Related item: Beware the Hammer Clause)

 

Story Archive:  Empowered Against Risk: PRMS Workshop Teaches Psychiatrists To Effectively Minimize Liability PRMS PRMS Presents a Mock Trial for Mental Health Professionals - PRMS PRMS, Supporting the Work and Goals of the American Psychiatric Foundation - PRMS A Case for Documentation: Liability Workshop Stresses Need for Thorough Record Keeping - PRMS New World of Communication Raises Concerns for M.D.s - Eve Bender, Psychiatric News Suicide Risk Management: Foreseeing Future Problems - Charles D.Cash JD, LLM PRMS Attends Bronx District Branch Annual Meeting June 8, 2005 National Health Care Risk Management Week 2005 June 2005 Special Supplement: Get to Know Jacqueline Melonas, RN, MS, JD - May 2005 Limiting Your Risks When Prescribing SSRIs - Psychiatric News, October 2004 Psychiatrists Advised on Ways To Avoid Legal Quicksand - Psychiatric News, June 2004 Making Risk Management Manageable: PRMS Seminar Keeps Psychiatrists on Top of Trends - PRMS, May 2004 Courts Interpret Boundaries Of HIPAA Privacy Rule Donna Vanderpool, J.D., M.B.A.- Psychiatric News, May 2004 Patient-Safety Strategies Can Reduce Suicide Risk Jacqueline M. Melonas, J.D., R.N., M.S. - Psychiatric News, April 2004 Use of S&R: Patient Safety, Risk Management Considerations Donna Vanderpool, J.D., M.B.A. - Psychiatric News, March 2004 PRMS Assistant Vice President Simplifies HIPAA at AOOP Conference - January 2004

PRMS, Inc. · 1515 Wilson Boulevard, Suite 800; Arlington, Virginia 22209-2402 · (800) 245-3333