claims made vs occurrence medical malpractice insurance

If you are a general surgeon, performing complicated procedures and surgeries daily, choosing the right medical professional liability insurance (aka medical malpractice insurance) is paramount. But how do you know which of the two primary types of coverages – Claims Made vs. Occurrence policies – is right for you?

Understanding the nuances between these policies is essential for you to make informed decisions about your coverage. Let’s take a look at the different policies to protect you and your patients.

Claims Made Policy

Claims Made policies are structured around the concept of coverage being active when both the incident and the claim occur within the policy period. In simpler terms, a Claims Made policy provides coverage when the claim is filed and while the policy is in effect. This aspect distinguishes Claims Made policies from occurrence policies and often influences the premiums associated with them.

Claims Made policies offer initial affordability due to lower medical malpractice premiums in the early stages of your general surgery practice. However, these premiums will go up over time as the policy matures. These 5-year rate steps are part of the plan because a Claims Made policy covers more years and more prior acts with each renewal. When a Claims Made policy is canceled because of a career change or a switch to a new insurance carrier, you must be sure to get prior acts covered in the new policy or purchase malpractice tail coverage – coverage for Claims Made after the policy has expired. The need for tail coverage is a critical consideration for you, as medical malpractice claims can emerge years after the procedure in question was performed. Failure to secure tail coverage can leave you vulnerable to costly legal battles and financial liabilities. The cost of tail coverage is typically 2 to 3 times the premium at the time of cancelation. 

Additionally, Claims Made policies include retroactive medical malpractice coverage, which safeguards against claims arising from incidents that occurred before the policy’s inception but were previously unknown. This feature is especially valuable for you as a surgeon if you are transitioning from residency to independent practice because it shields you from potential liabilities stemming from past procedures. Most Claims Made policies include a free medical malpractice tail coverage in the case of death, disability, or permanent retirement. This makes it an attractive option for you if you practice in one place and use the same medical malpractice liability insurance carrier for many years.

Occurrence Policy

In contrast to Claims Made policies, occurrence policies provide coverage for any medical malpractice claim that transpires during the policy period, regardless of when the claim is filed. This fundamental difference simplifies the insurance process for general surgeons, offering greater predictability and stability in premium costs. With occurrence policies, there’s no need to purchase tail coverage, as the medical malpractice coverage remains intact regardless of changes in insurers or retirement status. The only problem is in the case that the insurance company becomes insolvent or is no longer in business. When that happens, there is no coverage for a claim. This risk is why some general surgeons prefer a Claims Made policy.

If you are seeking long-term peace of mind and financial security, occurrence policies present an attractive option, although the premiums are higher than a Claims Made policy. When comparing the cost of the two types of policies, remember to factor in the potential cost of tail coverage in a Claims Made policy if needed. 

Navigating the Decision-Making Process – Claims Made vs. Occurrence Policy

Choosing between Claims Made and occurrence policies requires careful consideration of various factors, including individual practice circumstances, risk tolerance, and long-term financial planning. While Claims Made policies may offer initial cost savings, they come with the caveat of potentially needing tail coverage. Conversely, occurrence policies provide stability and simplicity but may entail higher overall costs.

If you are a newly established general surgeon or operate within a high-risk specialty, Claims Made policies offer an accessible entry point into malpractice insurance. However, as your practice matures and the risk profile evolves, you should consider evaluating all options available. Working with an independent broker specializing in medical malpractice/professional liability insurance will provide more options than just working with one insurance company.

Finding the Right Fit

As a general surgeon, selecting the appropriate insurance policy is a critical decision that can profoundly impact your professional and financial well-being. Although both offer unique advantages, the choice between Claims Made and occurrence policies hinges on individual circumstances, risk preferences, and long-term career objectives. While Claims Made policies provide affordability and retroactive coverage, occurrence policies offer stability and simplicity without the need for tail coverage.

Regardless of which type of coverage you select, find a trusted advisor who prioritizes comprehensive Medical Malpractice Liability insurance to protect your practice and your patients.

Do you still have questions about Claims Made vs. Occurrence policies? Or need help selecting the right malpractice insurance for your practice? Feel free to contact Monte Shields at