How I Helped an Addiction Medicine Physician in Alaska Avoid Purchasing a Tail Policy and Fill a One-Month Gap in His Coverage
Dr. Randall Floyd called me in a bit of a panic. An addiction medicine specialist in Anchorage, Alaska, he had put off securing a replacement medical malpractice insurance policy for almost a month past the expiration of his previous policy. The medical group he was employed with had changed their corporate structure where they were no longer going to consider him an employee, but rather a 1099 Independent Contractor. Once his status with the group changed to an independent contractor, the group stopped providing his addiction medicine malpractice insurance.
Dr. Floyd was now responsible for securing his own individual medical malpractice insurance coverage even though he would still be working with this same group. He had never been required to provide his own medical malpractice insurance previously, and perhaps an intimidation with the process was behind his allowing his coverage to lapse. Regardless, I informed him he would need to purchase a malpractice insurance tail policy for his previous expired coverage, along with a new policy moving forward. I shared that there was a small chance I could get a carrier to close the one-month gap in his coverage with a nose policy, but couldn’t guarantee anything.
Addiction medicine is a touchy subject for the majority of medical malpractice insurance carriers due to the large number of nuisance claims that arise from this type of specialty practice. The patients who addiction medicine physicians treat suffer from substance use disorder, and a large number of these nuisance claims are filed by patients denied the type of narcotic drugs they are seeking. For this reason, the marketplace for addiction medicine malpractice insurance is relatively small as even nuisance claims carry legal fees related to getting them dismissed.
What made Dr. Floyd’s situation even more difficult was his jail exposure due to some of his patients being arrested while in his care and his obligation to continue to treat them while in custody. As you can imagine, this is another area of addiction medicine that medical malpractice insurance companies are not fond of because, again, multiple nuisance claims come from the jail/prison setting.
Dr. Floyd had three strikes against him — a gap in coverage, addiction medicine and jail/prison exposure. I was actually excited by the challenge.
While shopping Dr. Floyd’s addiction medicine coverage, the many malpractice carriers we have access to kept responding that they were not willing to cover his prior acts due to the gap in coverage in conjunction with his practice activity. I let Dr. Floyd know the bad news that he would need to buy malpractice insurance tail coverage from the previous insurer and that he would likely continue to have that one-month gap in his coverage. I did promise him I would keep my ear to the ground, hoping another option might pop up.
As Dr. Floyd was preparing to move forward on purchasing tail coverage and a new policy, I gave one of my underwriters another call to see if I could smooth talk and tug on his heartstrings. Dr. Floyd had done nothing wrong and was claims free; he just procrastinated and was being unjustly penalized for that. I was able to convince the underwriter to offer coverage of the prior acts and a policy moving forward as long as he signed a “no known loss letter” for the gap period in his coverage. I was able to help Dr. Floyd avoid paying the costly malpractice insurance tail coverage associated with his previous policy and continue practicing uninterrupted.
Are you looking for medical malpractice insurance in Alaska? Or any other state? Are you practicing in a difficult to insure specialty? Call me at 708-848-2300 to discuss your options.