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Transcript – Episode 5: Lapse and Gaps

Episode 5: Lapse & Gaps

Transcript

Hello everyone. Thank you for joining our podcast today. This is Phil Lawson, Vice President of Product Development and Risk. Today we’ll talk about lapse and gaps, keep your coverage continuously. But before we do, I must say that you healthcare professionals are to be congratulated for the noble work that you do and be recognized for the positive difference that you bring to people’s lives every day. You are all healing change agents, helping people throughout all walks of life, making life better. There is no greater cause than your passionate and skilled contributions to people. That is why we have your back here at the risk retention group, that the policyholder’s own that is insuring them.

We are dedicated to your wellbeing and to your protection. Our nation truly values your services now and into the future shown by the following statistics. You may be interested to know that the US Department of Labor Bureau of Labor Statistics in 2016, forecasted that the following to occur for the next 10 years through 2026. The healthcare field is booming. I look at the fastest growing 30 occupations of all occupations in the country indicate that eight are in the allied health sector.

This sector contains a variety of healthcare behavioral health care workers, working in many occupations and therapies. These eight occupations account for 4.9 million workers today and over 13 million workers in 10 years, which is a 32% growth rate over the decade. That’s over four times the average growth rate compared to all occupations in the US. You’re working in a truly growing, important and highly valued field. So we want to talk about avoiding malpractice and tips for allied health workers, healthcare workers to manage risk and specifically lapse and gaps in your insurance policy, keeping your coverage continuously. A lapse in coverage is a lapse that can hurt you. Don’t let it happen to you.

Claims made professional liability insurance coverage, especially during the first several years of the policy is relatively low cost in premium. And it’s popular because it offers high quality, portable protection and at an affordable cost while keeping up with claims costs inflation. If you had continuous coverage over the years with no lapses or gaps, you should check with your professional liability insurance carrier to determine if the protection level you purchased today would apply should a lawsuit or complaint be brought against you now for a covered error or omission that occurred years ago when your policy limits may have been lower. If you’re like many healthcare professionals, whether just starting out in practice for years or you focus more time and energy on taking care of your clients than you do on learning easy, affordable ways to protect yourself, your career, and those who depend on you. If you already have professional liability insurance, please take a few minutes now to learn more about how the policy works and how to avoid simple administrative missteps that could adversely affect coverage available when you need it.

With claims-made professional liability insurance, even a short lap or gap in the coverage could leave you unprotected in the future. A lapse could jeopardize your past coverage for errors and omissions under the policy and malpractice issues as well as all the premiums you’ve paid over the years. Unfortunately, some insured have learned this the hard way and found themselves without coverage or defense when they need it. Don’t let this happen to you. Gaps and lapses and claims made coverage are completely affordable. Just keep these important tips in mind. Oh by the way, if you want lifetime coverage, just buy an occurrence policy, you’ll pay a little more in premium in the early years. But personally I think that’s the way to go. But there are people who are insureds who are very price-sensitive and they want to minimize their outlay. So feel free to do that, but you have no protection on the back end of the policy unless you buy an ERP, a tail coverage, which we’ll talk about in a minute.

So if you plan to continue your current claims-made coverage, always renew and pay your premiums on time or ahead of time to maintain continuous coverage with no lapse or gaps that could leave you without protection in the future for past errors or omissions. Follow up-to confirm your renewal application and if the payment was received. Keep good documentation of your coverage renewals and payment history where you can find it. If you plan to discontinue your claims-made coverage. Do not let your policy lapse without contacting your insurance carrier to put an extended reporting period in place or what’s called a tail coverage in place.

Tail coverage or extended reporting period or ERP is very affordable. It’s usually one to three times the annual payment of your current premium, depending on how far out you go for coverage. The risk retention group goes out to 12 years further than any other carrier. Most carriers only have a tail cover of four to six years and many are much more premium. Keep good documentation forever. A copy of your policy, your continuous renewal history, and confirmation of tail coverage or ERP period filed where you can find it easily should you need it in the future. If you want to switch from one claims-made insurance coverage to another, don’t cancel your previous policy until you’ve received your new policy confirmation.

That could be your Dec page, certificate of insurance, but I advise you personally to get a copy of the actual policy contract and read that over from your carrier. Consider your options and costs for prior acts or no’s coverage on your new policy, which provides coverage for prior errors or omissions versus extended reporting period or tail coverage on your old policy. You need one but not both. Prior acts coverage is still available at no cost with respect to special circumstances with the risk retention group. Thank you for listening and that concludes our podcast for today.

Podcast – Episode 5: Lapse and Gaps
Related – Avoiding Malpractice Tip: Keep Your Coverage Continuously