Since most training programs cover their trainees for malpractice insurance, it is probably the last item on your mind. And, you already have enough residency and fellowship issues to worry about right now. Nevertheless, as soon as you apply for your first job, all of that will change—malpractice insurance costs in the range of tens of thousands of dollars. Tail insurance can cost even more than the malpractice insurance itself. And, if you are not aware of the existence of this insurance, you can lose a bundle when/if you decide to change jobs. So, what exactly is malpractice insurance tail coverage, and why is it so critical to know how it works before taking that next job?
What Are The Different Types Of Malpractice Insurance?
First, we need to discuss some of the basics of malpractice insurance and the types of insurance policies. The two types of insurance policies you will often hear about are occurrence and claims-made policies. The least common type of malpractice insurance is called an occurrence policy. It covers all claims made before and after you leave a practice. Why is an occurrence policy less common? Simply because it is more expensive than claims-made plans.
On the other hand, a claims-made policy terminates right after you leave your job. So, if you stop working and are sued for a claim after you leave your employment, you will have no coverage. And, attorney’s fees can be costly!
Malpractice Tail Insurance- A Gap Filler!
So, what does malpractice tail insurance do? Naturally, it covers any lawsuit claims from your old job that occur after you change positions. The old claims-made policy does not cover these potential suits. This way, you will continue to have malpractice insurance if you leave.
How Can Practices Weaponize This In A Negotiation?
Knowledge is power when it comes to negotiating a contract. And, frequently, many residents don’t know to ask about malpractice tail insurance. So, when the time comes to change jobs, they are stuck negotiating with the next practice for malpractice tail insurance coverage as a benefit. This negotiation has the potential to decrease the overall compensation package at the new job. In a worst-case scenario, you may have to flip the entire bill out of your pocket.
And this sum of money is not insignificant. One article quoted the malpractice tail insurance costing 2.5 times the cost of malpractice insurance per year. In the world of radiology malpractice insurance, this can translate into a bill for 40-50 thousand dollars. That is serious money that could have gone to paying down debt, buying a new house, or your kid’s college savings. And, you could have potentially avoided all this loss by negotiating a tail in your first contract!
The Key To Knowing About Malpractice Tail Insurance!
My point about all this is to know what you are getting into before you take your next job. Other parts of the compensation package may be too good to overlook, and a claims-made policy without the tail coverage may be relatively insignificant. Or, it can be a deal-breaker. Regardless, don’t let a new practice tell you that they have excellent malpractice insurance coverage, only to find that you have an enormous bill to pay when you leave. Pop the question before you take your next radiology job!