Malpractice insurance is a necessity for people in many different professions. Doctors, lawyers, engineers, architects, nurses and other professionals purchase malpractice policies to protect themselves from lawsuits filed due to errors or negligence. If you are considering professional malpractice insurance, be sure you understand the differences between the two main policy types before you purchase one.
Occurrence policies cover you for any event that happens during the coverage period, regardless of when it is reported to the insurer. This means that the policyholder remains protected from claims made after the policy is allowed to expire due to retirement or another reason. This is the most comprehensive form of coverage, and it is also the most expensive due to the increased risk assumed by the insurer.
Claims-made policies provide coverage to the policyholder only if the event is reported while the policy is active. Once the policy expires, any claims reported are not covered by the insurer. Claims-made coverage is the most widely available form of professional malpractice insurance and generally comes with lower premiums than occurrence policies do.
It’s a good idea to assess your business and your future plans before purchasing a policy. Once you’ve done that, talk to an insurance agent about your policy options for professional malpractice insurance.