News In Brief 2/9/18
Liability Coverage After Death of Psychologist
Do you know what happens if a malpractice complaint is made after your retirement, incapacitation, or death? The answer depends on the type of professional liability insurance that you have.
If you have an occurrence policy it protects you from any covered incident that occurs during the policy period, regardless of when a claim is filed. An occurrence policy will respond to claims that come in – even after the policy has been canceled – as long as the incident occurred during the period in which coverage was in force. Occurrence coverage has higher premiums, but in the event of the retirement, incapacitation or death it will provide the coverage for the period of time when you were active as a professional.
The lower-cost, claim-made policy only covers claims made during the time period of the policy. If the insured discontinues this coverage, then a tail policy has to be purchased separately to cover any complaints filed outside of the covered time period. Thus, if a malpractice claim is made after a psychologist’s retirement or death, a tail is needed to provide the coverage. According to Joe Scroppo, Ph.D., J.D., The Trust offers free tail coverage in the event of incapacitation, retirement, or death. The estate or the professional will executor simply notifies The Trust when to initiate the tail coverage. Make sure to ask your insurance carrier whether your tail is free after incapacitation, retirement, or death!
In both cases, it seems to be highly unlikely that estate assets would be tapped to cover licensing board complaints or civil lawsuits. However, if the expenses exceed the limits of coverage, the estate will be responsible for the exceeded balance.
You can also see a webinar Ethics and Risk Management in Retirement of your Psychological Practice by going to http://thetrust.bizvision.com/product/practice-management/ethicsandriskmanagementinretirementofyourpsychologicalpractice%2813617%29