Malpractice Insurance 101: Understanding the Difference Between Claims-Made and Occurrence Policies

Malpractice insurance is a great asset for doctors of optometry who are eager to practice to the full scope with peace of mind. It is important for ODs to familiarize themselves with their policy to ensure they are adequately protected.

When it comes to malpractice insurance policies, there are two main policy types : claims-made and occurrence. These policies have distinct differences, and it is crucial for every OD to know which type of policy they have.

• What is an occurrence malpractice insurance policy? An occurrence policy provides coverage for incidents that occur during the policy period, even if a claim is not filed until after the policy has ended. For example, let’s say that an OD purchased an occurrence malpractice insurance policy in 2010, but switched insurance providers in 2015. In 2021, one of the OD’s former patients files a claim for an incident that occurred in 2013. In this scenario, the OD is still covered by the first occurrence policy because the incident took place while the policy was active, even though the claim was not filed until the occurrence policy had ended.

• What is a claims-made malpractice insurance policy? A claims-made policy provides coverage only for claims that occur and are reported while the policy is in effect. For example, let’s say that an OD purchased a claims-made policy in 2010, then cancels their policy in 2015 and does not purchase tail coverage. In 2021, one of the OD’s former patients files a claim for an incident that occurred in 2013. Because the claims-made policy is no longer in effect and the OD did not purchase tail coverage, the OD is not covered for the claim.

• What is tail coverage? If an optometrist has a claims-made malpractice insurance policy and then switches insurance providers or policy types, they will need to purchase tail coverage. Tail coverage can be purchased when a policy is terminated and extends the limits of claims-made coverage. With tail coverage, an OD can be protected from a past incident, even if the claim is filed after the policy has been canceled. For instance, if the OD in the example above had purchased tail coverage after canceling their claims-made policy, they would have been covered for the 2013 incident, even though their policy was no longer active when the claim was filed.

• When might an OD need to purchase tail coverage? Some optometrists may have malpractice insurance that is provided by their employer. If the employer-provided malpractice insurance policy is a claims-made policy, the OD may be responsible for purchasing tail coverage if they leave for a different position. In addition, if an OD chooses to switch from a claims-made insurance policy to a different insurance provider or to an occurrence policy of their own volition, they may need to purchase tail coverage to ensure they are covered for past incidents.

As a member benefit, AOA members can receive a complimentary policy review from AOAExcel’s endorsed malpractice insurance provider, Lockton Affinity, to ensure they are adequately covered and have the policy type that best suits their needs.

This content was provided by Lockton Affinity, AOAExcel's strategic partner. Available insurance products include professional liability, cyber liability, business owners' insurance, employment practices liability insurance, and much more. To learn more, visit AOAInsuranceAlliance.com or contact Lockton Affinity at Info@AOAInsuranceAlliance.com.