Considerations for Covering Previous Year's Errors in Current PI Policy

Medical indemnity insurance protects doctors from financial repercussions arising from claims of errors, omissions, and negligence during practice in the current policy tenure, a crucial question arises: what about mistakes made in a previous policy year? Here are key considerations to ensure coverage for the previous year's error in the current policy tenure.

Extended Coverage for Past Incidents

With extended coverage for past incidents, your current policy can potentially protect you from errors or omissions that occurred in a previous policy period, as long as two crucial conditions are met:

• Discovering the Error During Your Current Coverage: The error itself must come to light during your current policy period.
• Reporting the Claim within Your Current Coverage: Once the error is discovered, a formal claim must be filed with your insurance company during your current coverage period.

The Retroactive Date

Every PI policy has a retroactive date. This date is crucial because it marks the beginning of your coverage period, and it determines the earliest point at which incidents are eligible for coverage under your current policy. It's important to ensure there are no breaks in your PI policy coverage. As long as you renew your policy continuously without any gaps, this retroactive date remains the same. This means, with each renewal your policy extends coverage to incidents that occurred after this original date, provided there have been no interruptions in your policy coverage.

Example of Coverage for Previous Year's Error in Current Policy Tenure

In 2018, Dr. Gupta, a respected surgeon, decided to purchase a professional indemnity insurance policy from EchoSafe Insurance Company on April 1, 2018. Understanding the importance of uninterrupted coverage, he ensured his policy was renewed annually without any gaps.

In 2020, seeking better terms, Dr. Gupta switched his insurance provider to Frontier Insurance Company. His new policy started on April 2, 2020, immediately after his old policy with EchoSafe expired. There were no gaps in coverage during this transition, maintaining the original retroactive date.

In 2021. Dr. Gupta faced a lawsuit for a surgery complication that occurred in December 2019. Because there were no gaps in his insurance coverage, Dr. Gupta's current policy with Frontier Insurance Company covered the claim. If the incident had occurred before April 1, 2018, it wouldn't have been covered, luckily, that wasn't the case.

Tail Coverage

Tail coverage is an optional add-on available with some PI policies. It acts as an extended reporting endorsement, providing coverage for incidents that occurred within your policy tenure but were not reported until after the policy expires. While tail coverage offers additional security, it typically comes with an additional premium cost.

Conclusion

Ensuring coverage for the previous year's error in current policy tenure hinges on maintaining continuous coverage. Gaps in coverage can leave you exposed financially. Understanding how PI policies handle past errors through features like extended coverage, retroactive dates, and tail coverage empowers you to make informed decisions regarding your professional protection. Don't wait for a potential claim to understand your coverage. Visit policybazaar.com to discuss the specifics of your PI policy with an expert and ensure you have the necessary protections in place.