advice
Are You Covered? Avoid These Malpractice Insurance Mistakes

QUESTION: I'll be covered under my new employer's malpractice insurance policy, but I'm also planning to see patients part-time on my own. Do I need a separate policy? Are there any pitfalls or loopholes I should be aware of?

ANSWER: There are several watch-outs here. Your employer's insurance will cover you for claims made during the course and scope of your employment. However, if you're seeing patients on your own during that time, you'll need a separate policy.

Also, if you're working as an independent contractor, be aware that you're not considered an official employee, and you may not be covered automatically under your employer's insurance policy. I recommend that your employer add you to his policy as an "additional named insured." This way, the policy specifically identifies you and gives you all the same rights as the "named insured," including the right to sue the insurer for failure to provide coverage. The cost is nominal ($50 or less), and by doing this, you can avoid some sticky issues that can arise if the insurance company is looking for an excuse for not providing you the coverage.

Another watch-out is the post-employment period. In a "claims made" policy (the most common), you're covered for any claim made during the term of the policy. If you're sued while the policy's in force, the insurer will defend and, if necessary, indemnify you.

But what if you're sued for care you provided during your employment, but the suit is filed 6 months after that employment has ended, say when you've opened your own practice or gone to work elsewhere? Your new policy won't cover the suit, and your former employer's policy won't cover it either, because you were sued after the policy coverage for you ended.

To protect yourself during transition periods, you can buy "tail" insurance. This will protect you against claims arising from your former employment, so long as you were covered by your employer's policy at that time of the alleged incident.

One last comment about deductibles. When buying malpractice insurance, many O.D.s focus on whether they're buying enough insurance to cover them if they lose a lawsuit. They forget about the cost of defending the suit. They don't realize that the deductible will be eaten up long before the merits of the case are determined. Choose a deductible based on how much you want to pay for legal fees before the insurance company takes over in the event you're sued. Don't think only in terms of the likely amount of the damages you'll pay if you lose.

Choosing appropriate malpractice coverage can be confusing. Before buying a policy, check with your state optometric association. Not only are they a valuable source of information, but they may offer the best rates.

Craig S. Steinberg, O.D., J.D.
herman Oaks, Calif.
University of Missouri-St. Louis
College of Optometry '84
craig@odlawyer.com

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