Question:
Dear Nancy,
Because lawsuits about medical care can be filed many years after an incident, do I need to continue my liability insurance after I retire? If so, for how long?
Janice
Nancy Brent replies:
Dear Janice,
Specific answers for your questions depend on some additional information. For example, the first issue is whether you have a claims-made policy or an occurrence policy. Claims-made policies will cover a claim or lawsuit filed while the professional liability insurance policy is in effect. An occurrence policy, in contrast, will cover a claim filed even after the insurance is no longer in existence, as long as the incident that gave rise to the suit occurred while the policy was in effect. As you can probably tell, occurrence policies are more expensive.
If you terminate a claims-made policy, the insurance company often suggests purchasing "tail insurance" that will cover any claims filed after the termination of the policy. The cost of these types of policies vary, and they are often more costly than the claims-made policy itself.
How long one should carry his or her professional liability policy depends on the type of policy they have purchased (as above) and the statute of limitations for specific types of injury. As an example, if you are a pediatric nurse, the statute of limitations for filing a suit involving a minor (someone 17 years of age and younger) is much longer than that for a suit involving an adult.
A good resource to evaluate your decision is your insurance company agent. Ask him or her for recommendations. Also, you can find information on many websites concerning professional liability insurance policies.
Cordially,
Nancy
