Every year across the United States, professionals across all industries pay out a total of around $55 billion a year in malpractice lawsuits. These claims are made when an individual suffers physical, emotional, or monetary damages due to proven malpractice from a business.
This is why having proper malpractice insurance coverage in place is absolutely vital.
There are two main types of malpractice insurance: claims made and occurrence insurance. It is essential that you know the difference between claims made vs occurrence malpractice insurance.
In the event that someone files a malpractice suit against you, having this coverage may well stop your business or practice from going under. Here is what you need to know.
Claims Made vs Occurrence Malpractice Insurance: Who Needs It?
Before getting into the key differences between occurrence vs claims made, it is worth explaining who actually requires it.
Medical practices are the chief customers, as they are most likely to be sued for malpractice if a patient receives physical or emotional damages due to malpractice.
However, general liability insurance of this kind is needed for any industry that physically deals with people.
One of these is security. If you own a security company, then use a well-known provider such as El Dorado Security Guard Insurance to ensure that you are properly covered in the event of a malpractice claim. This will ensure you do not have to bear the full costs of a seven-figure lawsuit.
Claims Made Insurance Explained
Medical malpractice insurance can be ‘claims made’. Essentially, this means that you are insured for a claim made during the period of the policy being in force. The incident in which the claim was made also needs to have occurred during the policy period.
This means that your coverage starts when the policy begins, and you are covered for anything that occurs during that period related to malpractice. When assessing occurrence vs claims made malpractice, this type of insurance is much cheaper.
This is because you are paying for continuous coverage, rather than paying to cover yourself as a result of an incident that has already occurred.
Occurrence Malpractice Insurance Explained
However, when weighing up the difference between claims made vs occurrence malpractice, sometimes occurrence is the right option. This is the type of insurance you will want if you are not covered and a real or potential malpractice incident occurs.
Occurrence insurance covers you for any incident that occurs during the policy year, regardless of when the claim is actually reported to the carrier. This means that if the incident occurred before you activated the policy, you are covered.
This type of insurance is more expensive than claims made insurance. This is because it is often sought out after a potential malpractice incident has already happened, meaning that a claim may be imminent.
However, it is still a lot cheaper than paying the costs of the lawsuit yourself.
Knowing about claims made vs occurrence malpractice insurance is the first step toward being prepared for a lawsuit. Make sure to get in touch with our experienced legal team today if you believe a malpractice lawsuit is headed your way.