Professional Liability Insurance
What to
Look for
A buyer’s guide
for Acupuncturists
Professional liability insurance protects you against liability arising from health care services you provide to patients. Until about a decade ago, most acupuncturists didn’t consider
malpractice insurance. With the growth of HMOs, PPO and comprehensive health care plans, acupuncturist services are now often included for coverage. Health plan credentialing procedures usually require providers to submit evidence of professional liability insurance. Before you decide on a professional liability carrier, ask these questions.
MIEC’s responses appear in italics:
• What is the company’s “A.M. Best” rating?
This will tell you the financial strength and management of the carrier.
MIEC holds a Best’s “A-” (Excellent) rating.
• Is the company licensed as an admitted carrier by the state of California?
A licensed company must submit its policies, applications and rates for approval by the California Department of Insurance. No changes can be made without state approval. If the company goes bankrupt, a state guarantee fund steps in to provide some financial protection to policyholders. Policies issued by non-admitted (‘surplus lines’) carriers have no such protections or safeguards. Generally, rates are higher through these types of carriers, and they require taxes and fees in addition to the premium.
MIEC is a licensed carrier, founded in California in 1975, with offices in Oakland. MIEC Group became the underwriter for the National
Acupuncture Purchasing Group program in 1999, with joint sponsorship of UCPCM, CSOMA and CCAA. MIEC is owned by its policyholders and operates on a
not-for-profit basis. MIEC limits its coverage to health care providers, mostly physicians.
•
What is covered … and what isn’t?
Professional liability insurance policies aren’t all the same. Professional liability insurance covers
your liability for providing services as a licensed acupuncturist to
patients. Every liability insurance policy has limitations, restrictions
and exclusions
to coverage. You have to read the literature and specimen policy to
familiarize yourself with these restrictions and exclusions. For
example, a policy might exclude coverage for direct moxabustion,
cupping, homeopathy, use of nondisposable needles, acupuncture
administered during labor and delivery, acupuncture used as anesthesia
during surgical procedures, and for acts or omissions not authorized by
your acupuncturist’s license. Make sure you understand the policy and
its exclusions.
Most professional liability policies provide coverage on a “claims-made”
basis. Claims-made policies require that you have a valid policy in
effect both at the time the service is rendered and at the time you
report a claim from that service to the insurance company. If you cancel
or don’t renew a claims-made policy, you will have no insurance for any
claims first reported afterward unless you buy additional insurance,
com-monly called ‘tail’ coverage. This ‘tail’ coverage extends your
policy protection for late reporting of claims.
MIEC uses a claims-made policy. In addition to coverage for health care
services to patients (as defined in Business and Professions Code Sections
4927 and 4937), we offer premises liability at no cost for
professional office locations that you own or lease (NOT home offices).
This insures your legal liability for injuries to patients or members of
the public that occur at your office premises —commonly known as “slip
and fall” occurrences.
We offer “tail” coverage if you cancel your policy for any reason. It is
free from MIEC if you retire at age 55 and have been insured with us for
at least five consecutive years, and there is no charge for ‘tail
coverage’ in the event of permanent disability or death.
• What are the “limits of liability?”
The limits of liability are the maximum amount an insurance company will
pay on your behalf for each claim (called the ‘per claim’ limit), and
the total amount available for all claims reported during any policy
period or year (called the aggregate limit). Most carriers offer several
choices in limits of liability: typically $500,000 per claim/$1,500,000
annual aggregate or $1,000,000 per claim/$3,000,000 annual aggregate.
Health insurance plans typically require at least $1,000,000/$3,000,000
limits.
MIEC offers acupuncturists two limits, either a
$500,000/$1,500,000 or $1,000,000/$3,000,000 limit.
• Are the costs of defense included?
Some policies do not pay for defense costs in addition to the liability
limits. For example, if you have a policy with a $500,000 per claim
limit, including defense costs, and lose a malpractice judgment for
$450,000 plus legal defense costs of $60,000, you would have to pay
$10,000 out of your own pocket because the insurance coverage stops at
$500,000. If the policy pays for defense costs in addition to the
limit, the cost of the whole claim would be fully covered.
MIEC’s policy pays for defense costs in addition to your selected
liability limits.
• What about settling if you are sued?
Ask if the company requires your consent to settle a claim or lawsuit.
It is important that you retain this right, because malpractice
settlements and judgments are reported to the National Practitioner Data
Bank, a federally mandated data base that supplies information to
hospitals, health plans, other credentialing bodies, and to the state
licensing agency. Some insurance companies limit the amount of coverage
available if you refuse to settle, and some require arbitration of
disputes or have other limiting clauses.
Also ask about how claims are reviewed prior to a decision to settle or
go to court.
As a policyholder-owned company, MIEC is committed to defending good
medicine, and our claims management is simple: we vigorously defend
nonmeritorious claims and equitably attempt to resolve those with merit.
We will not settle any malpractice case without your consent unless it
is unreasonably withheld.
Every suit filed against an MIEC policyholder is reviewed by an
acupuncture society-appointed peer review committee before trial or
settlement. These committees of acupuncturists bring a depth of
under-standing of medical facts not available within an insurance
company. They provide valuable advice on the medical standards of care.
More than 85% of reported claims against MIEC policyholders close with
no indemnity paid.
• What other benefits does the carrier offer?
Loss prevention services are some of the most important and tangible
benefits you can have from
a carrier. No one knows better than your insurer about the specific
steps you can take to prevent claims. Ask about a prospective company’s
loss prevention services.
What about online services? You are busy, and the ability to communicate
with your carrier, or handle business details 24 hours a day, seven days
a week, can be an attractive side benefit.
As a policyholder-owned company, MIEC’s number one priority is to serve
you, our policyholders. Our loss prevention program is active and
accessible, both online and by telephone. We are keenly interested in
helping you reduce your liability exposure, and offer loss prevention
tips in our claims prevention guidebook and seminars. Our website has a
policyholders only area for acupuncturists, where you can order requests
for insurance verification and claims histories online, and can get
claims prevention information.
