A general surgeon in Savannah, Ga., recently called me in need of help with the high cost of tail coverage she was offered by her employer. She was leaving a group practice and moving out of state to take a new job. When she informed the group she was leaving, they told her she would need to buy her own medical liability tail coverage to protect her prior acts during the time she worked for them. This was spelled out in her employment contract.
Most physicians don’t check their employment contract for who is responsible for purchasing medical liability tail coverage until it is too late. I always advise my clients to try and negotiate with a potential employer to have them pick up at least a portion of the tail cost upon exiting. The worst a potential employer can say is no, and like Wayne Gretsky once said, “You miss 100% of the shots you don’t take.”
The general surgeon was shocked to see the tail-cost quoted by the group’s medical malpractice insurance carrier was $132,000. A general surgeon, she knew the cost of medical liability tail coverage would be high, but never did she envision having to pay six figures just to change jobs — especially when she has never had a claim filed against her. The surgeon was also in the process of buying a new house in the state she was moving to, so funds were extremely tight. She felt she would need to take out a personal bank loan just to cover the cost of her medical liability tail coverage.
When I initially spoke this surgeon, she was frantic. She was actually contemplating changing her specialty to avoid being put in another situation like this in the future. I was able to calm her down and let her know there is a market for stand-alone tail coverage where savings can be found with an A-rated carrier. She was relieved to learn she didn’t have to buy tail coverage from the insurance company that covered her while she was employed by the group.
As I searched the marketplace and provided quotes for this surgeon, she began to see the light at the end of the tunnel as every quote I found in the stand-alone market was under $100,000. The question now was how low can I get the quote and how much can I save her? After all of all the carriers we work with responded, we were able to secure coverage for $97,000 — a savings of nearly $40,000.
The general surgeon I worked with was very happy with the savings, but she still felt it was than she could afford to pay at one time. Because the majority of medical liability tail coverage policies have to be paid in full at the time of purchase, she asked if there was any way I could assist her with finding a payment plan. While I shared that I thought it would be unlikely, I did reach out to my underwriter to ask. I explained the situation, pleaded her case and they agreed to offer her a three-year payment plan, with one-third of the total premium due each year. My client was overjoyed.
This situation could not have gone better for her. Not only did we place the general surgeon’s coverage with an A-rated carrier, we also saved her an extremely large amount of money and were still able to coordinate a payment plan for her. My client was able to buy her medical liability tail coverage and still purchase her new home and continue on with the next chapter of her professional life.
If you would like help in obtaining a quote for medical liability tail coverage, call 708-848-2300 and ask for Tim Arnieri.