Claims Made Policy Type

The claims made policy protects you against incidents that arise from treatment provided after your policy's retroactive date and are reported while your policy is in force. Your retroactive date usually reflects the date your OUM policy started, however OUM will transfer your retro date from another carrier with underwriting approval. As long as you continuously renew your claims made policy, you may report claims for incidents that occurred in previous policy years, back to your retroactive date.

Example of Claims Made Policy Coverage

You became an OUM Claims Made policyholder in 2004 and have renewed your policy continuously since then, with no lapse in coverage. A patient you treated in 2006 files a malpractice claim against you now. Because you have renewed your policy continuously since 2004 and it is currently in force, you are still protected by OUM for that 2006 incident.

Benefits

The premiums in the initial years of a Claims Made policy are much less than those of an Occurrence policy. In general, a Claims Made policy will save you money over an Occurrence policy after just three years.

Limits of Liability

With a Claims Made policy, the limits of liability in effect when the claim is made are the limits that apply toward any settlement or judgment.

Example of Limits of liability

In 2004 your OUM Claims Made policy had limits of liability of $100,000/$300,000. Then, in 2006, you increased your limits to $1 million/$3 million. Also in 2006, a patient you treated in 2004 files a malpractice claim against you. Which limits of liability apply? The $1 million/$3 million limits of the current policy year apply because those are the limits in place when you reported the claim.

Long-Term Protection

If you decide to discontinue your OUM Claims Made policy, tail coverage is available to extend your claims reporting period indefinitely.

Limits of Liability

Both Claims Made and Occurrence policies allow you to select the level of protection that's right for you. When deciding which limits of liability will best protect you, we recommend the following:

Determine which of your assets are vulnerable and their estimated value.
Establish the current level of risk your practice incurs on a day-to-day basis.
Consider any PPO requirements.

Limits of liability are stated as two dollar figures, representing two levels of protection:

The first figure represents the maximum dollar amount OUM will pay per claim each policy year.
The second figure represents the maximum dollar amount OUM will pay for all claims during the policy year.

In addition to these limits of liability, OUM pays for your defense costs. OUM offers seven coverage limits:

$100,000/$300,000
$200,000/$600,000
$250,000/$750,000
$500,000/$1 million
$500,000/$1.5 million
$1 million/$1 million
$1 million/$3 million

Some limits of liability are not available in some states.

Occurrence Policy Type

The Occurrence policy protects you against incidents that occur while the policy is in force, regardless of when the claim is reported. Tail coverage is unnecessary if you discontinue this policy because the cost of extending your claims reporting period is built into the annual premium.

Example of Occurrence Policy

You became an OUM Occurrence policyholder in 2004, and discontinued the policy in 2006. A patient you treated in 2004 files a malpractice claim against you now.

Because the patient was treated while the policy was in force, you're able to report the claim to OUM for that 2004 incident.

Benefits

This policy automatically protects you both now and in the future for any incidents that occurred while you were an OUM policyholder. This means that you can report claims:

During the current policy year, and
After your policy has ended.

Limits of Liability

With an Occurrence policy, the limits of liability in effect when the treatment prompting the claim occurred are the limits that apply toward any settlement or judgment costs.

Example of Limits of liability

In 2004 your OUM Occurrence policy had limits of liability of $100,000/$300,000. Then, in 2006, you increased your limits to $1 million/$3 million. Also in 2006, a patient you treated in 2004 files a malpractice claim against you. Which limits of liability apply? The $100,000/$300,000 limits of the 2004 policy year apply-because those were the limits in place when the treatment prompting the claim occurred.

Tail Coverage

Tail coverage is optional malpractice protection that allows you to report claims after your OUM policy has ended for alleged injuries that occurred while your policy was in force. It is necessary only if you discontinue your OUM Claims Made policy.

Cost

Tail coverage is a one-time fee (and in some instances it's at no additional charge!) that's calculated as a percentage of your annual premium. When you purchase tail coverage, your policy's existing limits of liability are extended indefinitely to pay claims reported in the future.

OUM also offers a unique vesting schedule that reduces the cost of tail coverage if you retire and discontinue your policy prior to qualifying for the tail.

Benefit

Tail coverage is a great way to protect yourself from the unexpected sting of future claims, and will provide you long-term protection and peace of mind.

Example of Tail Coverage

In 2004 you purchased an OUM Claims Made policy. In 2006 you discontinued your policy and purchased tail coverage to extend your claims reporting period. Today a patient you treated in 2004 files a malpractice claim against you. Because you purchased tail coverage when you left OUM, you may report that claim to OUM today for the 2004 incident.