Tail Coverage Cost for Family Medicine | Tail Insurance

What is the average tail insurance cost for a physician who practices family medicine? Let’s first talk about the different types of medical malpractice insurance and then determine how much it will generally cost. First, there are two main coverage types: a claims-made policy or an occurrence-based policy. The physician does not need tail insurance if it’s an occurrence-based policy. 

I mean, what it means is that a policy must be in effect when the claimant occurs or where the incident occurs. And in that scenario, you don’t need tail insurance. Occurrence coverage is usually about a third more expensive than claims-made. And so that’s why some employers only use claims-made coverage because it’s cheaper. A claims-made policy means a policy has to be in effect when the claim is made.

And there’s a scenario where an employee can terminate the employment agreement. Then there’s still going to be a gap between the last patient they see for that employer and the last day that the patient could sue them. In most states, it’s two years, although there are exceptions that can go longer than that. It’s a gap policy that covers that time, called tail insurance.

How Much is Tail Insurance?

A good rule of thumb is that tail insurance is about twice your annual premium. This is state-specific. I can’t give you an exact amount for every state. Still, a general rule of thumb is that most primary care physicians will pay somewhere between 6,000 to 8,000 yearly for their annual premium. And so, if the tail insurance costs around twice that, their tail insurance costs would be somewhere between 12,000 to 16,000. That’s a one-time payment. It’s not that the physician must pay that amount every single year until the tail insurance coverage period ends. It’s a one-time payment and then usually covers the entire gap. 

Tail insurance Coverage: Shorter or Longer?

Now, the physician could pay either more for a more extended tail insurance coverage or less for shorter tail insurance. But it makes sense if you’re going to pay for tail insurance. You make sure that you get a policy that covers the entire gap. And if you were to get a two-year policy, then it’s two years from when you either know or should have known about a malpractice incident. If the patient couldn’t have known before then, finds out, and then sues you after those two years, then you are stuck. 

So, I would suggest getting the more extended tail insurance, even though it’s a little more expensive. Now, who pays for tail insurance depends, I guess, on where you’re employed. If you’re employed with an extensive hospital network, usually most of them, at least nowadays, are self-insured. And rarely would they pass the cost of tail insurance or force the physician to pay for it. I guess private practice is the most common setting where the family medicine physician would have to pay for tail insurance. Let’s say it’s a small physician-owned practice. They use claims-made insurance. 

And then in the employment agreement, it’s going to state who is responsible for paying for the tail insurance. In the scenario, let’s say the employee is responsible for paying for tail insurance. Well, it’ll state by the end of the contract. Meaning, that before the last day that the physician works for the employer, they must purchase a tail insurance policy and provide proof of that to the employer. Now, a couple of ways of getting out of having to pay for it.

Ways to Avoid Having to Pay for Tail Insurance.

Obviously, if you negotiate before signing the contract, the employer will pay for it. I mean, that’s one way of getting out of it. For most states, if you stay with the same insurance company or move from one private practice to another and use the same insurance provider. Then usually, that insurance provider will roll over your old policy into a new one. You won’t have to pay for tail insurance. Now, if you’re going from hospital to hospital, they will seldom use the same insurance company. That won’t be possible. And then the third way is called nose coverage. And that’s when your new employer pays your old tail insurance. As I said, you can think of it as a quasi-signing bonus.

If the tail insurance cost is 16,000 and the new employer will pay your old tail insurance, it’s kind of like a bonus. And in that scenario, it’s specialty-dependent. Some specialties have very high annual premiums, like OB-GYNs or some surgeons. It might be a significant negotiating point for a new contract if they’re responsible for their tail insurance. But in family medicine, it’s a reasonable amount, not going to break the bank for anybody. Indeed, it’s an amount that you would prefer not to pay. 

But it’s not some crazy amount that will cripple someone financially. I guess the biggest, I don’t know if “problem” is the right word. Still, if somebody starts an employer and only works for a year and then terminates the agreement, they’re responsible for tail insurance. It may be a little less than twice. But still, you could work for a company for one year and still must pay one and a half to two times the annual premium.

Do I Want an Occurrence-Based Policy or a Claims-Made Policy?

Suppose you took short stints with employers and are responsible for paying tail insurance. In that case, you’ll lose a lot of money over time, so consider that. Or maybe if you have the option of deciding, do I want an occurrence-based or a claims-made policy? Maybe do the math on, alright, I’m going to pay a third more per year for occurrence. Still, if you stay with an employer for a more extended period, maybe it works out that an occurrence policy would make more sense than claims-made. That is a little primer on tail insurance costs for a family medicine physician.

Other Blogs of Interest

• Family Medicine Contract Negotiation Tips | Negotiate Physician Contracts
• Why is Physician Tail Coverage so Expensive? | Tail Insurance
• How Long Does Tail Coverage Last? | Tail Insurance

Tail Insurance Cost for a Physician Assistant | Medical Liability Insurance

How much is tail insurance for a physician assistant? First, let’s talk about the different types of malpractice policies. And then we’ll talk about how much it will cost if you must pay for it. First, the setting is essential. Suppose a PA is employed by a hospital or hospital network. In that case, usually, they’ll be self-insured or have a claims-made policy, or they’ll cover the cost of tail insurance. Very rarely, if you’re a PA and work for a hospital, will you have to pay for your tail insurance? It just doesn’t happen very often. Now, suppose you’re in private physician-owned practice. In that case, it’s more likely that you will be responsible for paying the tail insurance costs if they have a claims-made policy.

Most private practices use one of two types of insurance. The first is called occurrence-based coverage. Occurrence-based coverage means the policy has to be in effect when the medical malpractice incident occurs; therefore, tail insurance is unnecessary. Now, why would you choose one over the other? An occurrence-based coverage is about a third more expensive, so it’s a math equation. Would you rather pay a third more per year to be insured but not have to pay anything at the end for tail insurance? Or is it better to have a third less per year and then pay the tail insurance cost at the end of it? For occurrence-based coverage, you don’t need tail insurance. Now, if it’s a claims-made policy, you do. Claims policy means a policy has to be in effect when the claim is made.

When Do You Need to Purchase Medical Malpractice Insurance?

If a PA is employed and the agreement is terminated, there’s still a gap between the last patient that the PA saw at the practice, and the last day somebody sues you. In most states, it’s two years from when you knew or should have known of the medical malpractice incident. There are some exceptions for minors when they become adults. 

But for the most part, two years is a good rule of thumb. In that scenario, if the PA left the employer, didn’t have a tail insurance policy, and was sued two years later, they’d be out of luck. They’d have no backup as far as medical malpractice insurance goes. Almost any employment agreement will dictate that one, tail insurance has to be purchased, and then two, who has to pay for it.

How it would work is in the contract if the PA is responsible for paying for tail insurance. Usually, it states they must purchase the tail insurance policy before the agreement is terminated. Usually, in the last week of their employment, they’d ensure that the tail insurance has been secured. Then they’ll have to provide proof to the employer. 

Tail insurance costs are usually around twice the annual premium for the PA. An annual premium is how much the employer must pay to insure the PA yearly. You multiply that number times two, and then that’s how much the PA would have to pay for tail insurance. It’s a one-time cost. You don’t have to pay it every year, but it does have to be paid upfront.

Tail insurance Malpractice Insurance Cost for Physician Assistants

How much is a regular annual premium for PA because that will dictate how much tail insurance is? Usually, PAs are somewhere between 1500 up to 4,000, depending upon specialty, but I’d say 2,000 is around the average. If you take two, multiply that by two, and tail insurance costs would be around 4,000. One thing to consider is that you can negotiate before signing the employment agreement about who must pay for tail insurance.

Ways to Avoid Paying Tail Insurance

If the employer is unwilling to make changes, one thing we’ve had success with is to say. If my agreement’s term is three years, then the employer will forgive a percentage of the tail insurance cost per year. So, if you have a three-year term, then maybe the employer would agree to cover one-third of the price if you stay for one year and two years, and then they’ll pay for all of the tail insurance after three years. Some employers are willing to do that versus an all-or-nothing type of thing. 

Another way of getting out of paying for tail insurance will be if your new employer pays for your old tail insurance. That’s called nose coverage. And then another way of getting out of paying for tail insurance is if you stay in the state, the new employer you have has the same insurance company. They’ll roll over your policy into the new one most of the time. 

And then you wouldn’t have to pay for tail insurance. It’s not prohibitively expensive for a PA. However, it’s still going to be thousands of dollars that the PA is going to have to pay in one big lump sum. And most people don’t want to do that. As I said before, it’s more likely than not probably like 75% of all private practice jobs require the employee to cover the cost of tail insurance. 

Is a Physician Assistant Malpractice Insurance Deal-Breaker?

Is this a deal-breaker for most people? Probably not. However, you’ll still have to pay if you’re hopping jobs a lot. And the contract says you will have to pay for tail insurance. You’re going to pay for tail insurance every single time. If you’re going to be long-term with an employer, maybe it will not be that big of a deal if you must pay for it. If you’re going to have a new job every year and you must pay tail insurance every year, that could add up over time.

And that may be something you want to ensure that the employer covers or even consider. If a hospital employee’s job almost always has the employer pay for tail insurance. Then maybe I want to lean more towards hospital or hospital network positions versus private practice where I must pay more. It definitely can be negotiated in advance. Deal-breaker? Probably not, but certainly something to take into account. So, that’s a little primer on tail insurance and how much it costs.

Tail Insurance for a Physician Assistant Explained

What is tail insurance for a physician assistant? The setting of where the physician assistant is employed usually will dictate what type of professional liability insurance they have, also known as medical malpractice insurance. Suppose a PA works for an extensive hospital network. In that case, generally, the hospital network will be self-insured, and tail insurance won’t be necessary. If they work for smaller, standalone hospitals, that facility might use claims-made insurance. Still, most of the time, like nine times out of 10, if a hospital or a hospital network employs a PA, they will not have to pay for tail insurance. Suppose they’re working for a smaller physician-owned group. In that case, that’s the setting where it’s most likely claims-made insurance is used, and then the PA would be responsible for paying for tail insurance.

Two Types of Professional Liability Insurance for Physician Assistants

Let’s kind of break down all these terms. First, in a smaller physician-owned setting, there are two common types of medical malpractice insurance. One is occurrence-based, and the other is claims-made. An occurrence-based coverage means a policy must be in place when a medical malpractice incident occurs. Tail insurance is not necessary for an occurrence-based policy. Now, why would you get claims-made versus occurrence? 

A good rule of thumb is an occurrence-based is usually about a third more expensive than claims-made coverage. Smaller physician-owned practices usually use claims-made insurance just because it’s cheaper. And then they’ll pass the cost of tail insurance onto the employee. And therefore, they are saving a third a year on medical malpractice costs and giving the tail insurance coverage responsibility to the PA.

Claims-made vs. Occurrence-Based Policy

In occurrence-based coverage, you don’t need tail insurance. When you need tail insurance, if there’s a claims-made policy and a claims-made policy means a policy must be in effect when the claim is made. Now, someone could leave an employer, and then there will be a statute of limitations: the amount of time somebody can sue the Physician Assistants. In most states, it’s two years from where you know or should have known of the medical malpractice incident. T

here are some exceptions for minors and things like that, but let’s use two years, for example. In that scenario, the Physician assistants leave the employer, and then a year later, somebody sues them. If they have a claims-made policy, that policy ends when they leave the employer. So, they need a gap policy, a tail insurance coverage that covers that gap between when they leave, and the last day somebody can sue the PA. As far as cost goes, a good rule of thumb is that tail insurance is usually about twice the annual premium. 

The yearly premium is the amount the employer pays to insure the PA annually. Usually, somewhere between 1500 to 3000 is an excellent standard amount for medical malpractice coverage for a PA. If they had to pay, it’s somewhere between 3,000 to 6,000. It is specialty-dependent. There are different risks for someone assisting in surgery versus someone just doing primary care. Or if you’re with an OB-GYN or something like that, it would be higher as well.

The Price of a Tail Insurance

But just a good rule of thumb is somewhere around twice what the annual premium is. You want to find out, alright, what’s the annual premium? Is the employer paying my annual premium? Which they should be. And then, in the contract, it will state who’s responsible for purchasing tail insurance. That is a scenario that a physician assistant can negotiate. You can do a math equation if the employer gives the physician assistant the option of getting occurrence or claims-made coverage. If you’re going to be there for a short period, it might make sense to get occurrence insurance. Whereas if you are going to be there for a very long time, doing the math, it could make sense to go for claims-made coverage. So, that’s a little primer on tail insurance for a physician assistant.

You need to make sure there’s language in the contract that states when the contract ends and who is responsible for paying if it’s a claims-made policy. Then just a couple more things, the new tail insurance policy will need to be purchased before the end of the PA’s employment with the employer. Then it’s a one-time payment. You don’t have to pay for tail insurance yearly. You’ll pay all the amount upfront. Then you’re covered for whatever amount of tail insurance you purchase. You can’t purchase shorter tails or unlimited tail insurance at just a matter of cost.

How Does Tail Insurance Work?

How does tail insurance work? Suppose you are a high-level healthcare professional like physicians, NPs, PAs, and dentists. In that case, you will need medical malpractice insurance while practicing. And then, depending upon what type of coverage you have, you may need tail insurance. I’m just going to break down the common types of medical malpractice insurance. And then when tail insurance is necessary and the details of when it needs to be paid, how long it needs to be paid, how much it costs, that type of thing. The two most common medical  malpractice insurance types in private practice are an occurrence-based or a claims-made policy.

When Do You Need Tail Insurance?

An occurrence-based policy must be in effect when a medical malpractice incident occurs. And in that scenario, tail insurance is not necessary. 

Under a claims-made policy, a policy must be in effect when the claim is made. It’s possible if a provider leaves an employer, there’s going to be a gap between their last day at work and then the last day somebody can sue them. It’s called the statute of limitations. For most states, it’s two years. There are some exceptions, but in general, two years is a good rule of thumb in this situation. 

Let’s say for this case. It’s two years. So, if you leave the employer, there will be a two-year gap where someone can still sue you for what you did for that employer. And so, in that scenario, you need a policy that covers that gap, known as tail insurance in the industry. If you have a claims-made policy, you need tail insurance. If you have an occurrence-based policy, you don’t.

Who Should Purchase Medical Tail Coverage?

The employment contract will dictate who pays the underlying premium if you have a claims-made policy. Ninety-nine out of a hundred times that will be the employer if you’re an employee and not an independent contractor. And then, the employment agreement will also cover who pays for tail insurance. Now, this can vary significantly from contract to contract.

Suppose you are working for the private physician-owned practice. I would say, more likely than not, that the provider will be responsible for paying for tail insurance. A physician-owned practice would rarely pay for tail insurance. I’d say maybe 75% versus 25%. So, 75% must pay for their tail insurance. In the contract, it’s going to state, alright, the physician is responsible for paying tail insurance. Let’s kind of break down the details of that.

The tail insurance policy will need to be in place before the end of the employment relationship. So, let’s say the physician gave notice, and there’s a 60-day without-cause termination. They will have to get that policy secured before the end of those 60 days when they leave.

Average Tail Coverage Cost

Tail insurance generally costs about twice what your annual premium is. This varies based upon specialty. So, if maybe your primary care, it could be around 5,000 to 6,000. Whereas if you’re an OB-GYN, it could be 40,000 or 50,000 yearly. A good rule of thumb is twice the annual premium, which you will have to pay for tail coverage. It’s a one-time cost.

You’re not going to have to pay it every year. Still, you will have to pay all the money upfront to purchase the tail insurance before the end of the employment relationship.

How Long is the Duration of a Tail Insurance?

Now, how long does tail insurance last? Well, it depends on what type of policy you bought. You can purchase one-year tail insurance, two-year tail insurance, five-year tail insurance, and unlimited tail insurance.

In my opinion, it seems shortsighted to purchase short tail insurance. Why would people do that? Well, it’s just a cost. Now, I said two times is the average. Still, it can range anywhere from 1.5 to 3 times the annual premium based on how long the tail insurance is. And then also, how long you’ve been with the employer and that type of thing.

Determining how long you should get should be easy. It should be unlimited tail insurance; it should go on forever. You don’t want a scenario where you are not covered when a claim is made. And that could be financially crippling for a physician or healthcare provider if they’re ultimately found guilty or must reach a settlement. 

Add Tail Coverage to Negotiations With Your New Employer

Now, you can negotiate who pays for tail insurance coverage in the employment agreement. If you go to the employer and say, hey, I’d like you to purchase my tail insurance, they may say no.

One strategy we’ve successfully asked the employer to forgive a portion of the tail coverage cost based on how long the provider has been with the employer. For instance, let’s say the physician has a three-year initial term. And completing the three years of negotiating with the employer is one way of getting out of having to pay for tail insurance coverage.

Another will be if your new employer pays for your old tail insurance. That’s called nose insurance. Or this doesn’t work if you’re employed in the hospital network. Still, suppose you are with a private-owned practice and leave for another private-owned practice within that state. In that case, they use the same insurance carrier. Generally, the insurance carrier will roll over your old policy into your new one. Then you won’t have to purchase tail insurance coverage.

Now, there’s no way you’re going to know. Okay, in my next job, when I leave this one, whether they have the same insurance or not, that’s another way of getting out of having to pay for tail insurance coverage.

So, that’s how tail insurance works. It just covers the gap between when you leave an employer. Then the last day somebody can sue you, it’s around twice the annual premium. And then, you can negotiate who ultimately is responsible for covering the expenses associated with it.

How is Tail Insurance Calculated?

How is tail insurance calculated? What is tail insurance? Under what kind of medical malpractice policy do you need it? And then how much does it cost? There are two common types of medical malpractice policies for healthcare providers. You have occurrence-based and claims-made. In a claims-made policy, you need tail insurance; if it’s an occurrence policy, you do not. 

Two Common Types of Medical Malpractice Tail Insurance Coverage

Let’s talk about the differences between the two medical malpractice insurance. For an occurrence-based policy, a policy must be in effect when the medical malpractice incident occurs. There is no need for tail insurance in that scenario, and I’ll explain why.

In a claims-made policy, a policy must be in effect when the claim is made. And so, for an employee who terminates a relationship with an employer, there will be a period where somebody can sue them. In most states, it’s two years. It’s called the statute of limitations. And in this scenario, let’s say a physician leaves the practice, they’re no longer an employee, and they have a claims-made policy, and that policy is done.

Well, they need an additional policy called tail insurance that covers the gap between when they leave the employer and the last day an individual can sue them. There are some exceptions in some states when a minor becomes an adult and a few other scenarios, but let’s use two years as a standard amount here. The employment contract will state that the employer will pay for the underlying policy, assuming you’re not an independent contractor.

Who Will Buy Tail Coverage?

And then, it will also state who is responsible for tail insurance. Suppose you’re in private practice, like a smaller physician-owned group. In that case, they’re likely going to have a claims-made policy. And it’s also very likely they will make the provider pay for tail insurance when the contract ends. If it’s an occurrence-based policy, you’re good; you don’t have to worry about tail insurance when the contract ends.

Why Would Someone Get One Over the Other? 

An occurrence-based policy is around one-third more expensive per year than claims-made. So, suppose it is a smaller physician-owned practice. In that case, employers usually use claims-made, so they pay a third less annually for the premium because they will be the ones paying for it. And then two, they’ll usually put the tail insurance cost on the provider. So, they not only pay less per year for the premium, but they also don’t have to pay for tail insurance, and it’s just cheaper for them. That’s why 9 out of 10 private practice owners use claims-made coverage. Some use occurrence-based, but it’s rare. 

If you have a claims-made policy, and it is determined in the employment agreement that you are responsible for paying for tail insurance, let’s break that down. It will state that you must purchase a tail insurance policy before your last day of employment with the employer. Usually, it’ll also say how long the tail insurance policy must be. 

How is Tail Insurance Calculated?

How To Calculate Tail Insurance? Different factors are considered. There are different lengths of tail insurance. You could have one year, two-year, five-year, or infinite, and then with each one, it’s a little bit more expensive. A good rule of thumb in calculating tail insurance costs is about twice your annual premium. Let’s say you’re a family practice physician. On average, your annual premium, so how much it costs to insure you each year, will probably be about $6,000. And so, if you had to pay double that, the tail insurance calculation would be $12,000.

Now, that’s a one-time payment. You do not have to pay it annually. You give it all at once, and then you’re covered for how long the tail insurance is. If it’s up to you how long the tail insurance lasts, it makes sense to get an indefinite tail insurance policy. You are rolling the dice if you have one-year tail insurance. Still, the statute of limitations is longer than a year because you’re uncovered for that period. And if you do not have medical malpractice insurance, they could come after you, potentially. And that could be catastrophic for a professional. Suppose it’s only a couple thousand dollars more. In that case, it’s simply worth it to get the most extended tail insurance policy you can. That way, it’s just one last thing you have to consider.

How Do You Get the Employer to Pay for Medical Tail Insurance?

Well, ask them when you’re negotiating. I’d like you to cover the tail insurance expenses. They may say no. If they do, you could come back at them, and we’ve had some success saying, alright, well, you’re not going to pay for all of it. What if we do it like forgiveness over the initial term? What I mean by that is, if you signed a three-year contract, you would say, alright, for every year that I complete for you, one-third of the cost of tail insurance will be covered by you.

So, after three years, when I’ve completed the initial term, you will be responsible for paying for tail coverage if I leave any period after that. You could also have your new employer pay for your tail coverage. That’s called nose coverage. And then the last way of not having to pay for it would be if you stay with the same insurance company with your new position. They’ll generally roll over your old policy into a new one. In that way, you don’t have to pay for tail coverage. So, that’s a little primer on how tail insurance is calculated.

Should a Physician Assistant Choose Claims Made or Occurrence Insurance? | Choose Occurrence 

Should a PA choose an occurrence-based policy or a claims-made malpractice policy? First, if you work for an employer, a policy will cover you for PA l medical malpractice insurance. And suppose you’re working for a smaller physician-owned group or a private practice. In that case, there will be two insurance types: claims-made or an occurrence-based policy. Most of them are self-insured if you’re working for an extensive hospital network or hospital. Therefore you won’t have to worry about the underlying premium or any tail insurance cost after the fact. It’ll all be rolled into their self-insurance program. So, today I’m going to talk about the differences between the two types of insurance when working for a smaller non-hospital employer.

What Is a Claims-Made Policy?

A claims-made policy means a policy must be in effect when the claim is made. You could leave an employer, so the agreement is terminated, but someone could sue you after the fact. Now for most states, there’s a two-year statute of limitations. That means a limit on when somebody can sue someone. There are some exceptions that I won’t discuss further. 

What Is Tail Insurance?

Think of it as the last day you worked for the employer, and then two years later, you must have a policy covering the gap between the two. And that’s called tail insurance. Now, tail insurance can vary in length. You could choose a one-year, two-year, three-year, five-year, or indefinite policy. It wouldn’t make sense if you were paying for the tail coverage to have a shorter amount than whatever the statute of limitations is in the state where you were working.

Just for peace of mind, it makes sense to get an indefinite policy. Tail insurance coverage cost is usually around twice what your annual premium is. The yearly premium is how much it costs to insure you annually. So, you would multiply that times two, and that’s a good assessment of how much you would have to pay. If you have an occurrence-based policy, you do not need tail insurance. It simply means the policy has to be in effect when medical malpractice occurs.

Difference Between Claims-Made and Occurrence Based-Policy

The difference between the two, and therefore you might want to choose one over the other, is that occurrence-based policy. It is about a third more expensive per year than a claims-made policy. However, even though you’re paying a third less for a claims-made policy, you’ll have twice your annual premium cost to pay for tail coverage. Most of the time, the PA will not have the option of purchasing one. They’re just going to say if you’re working as an employee. It is the policy that we’re going to provide to you. Other topics of interest include:

What is Occurrence-Based Insurance for a Physician Assistant?

Tail insurance Insurance for a Physician Assistant Explained

And then in the job employment agreement, it’s going to state who is responsible for paying for tail insurance. So, it would help if you investigated the professional liability insurance section. Then you need to see what type of policy is offered and who is responsible for paying for the tail coverage cost after the agreement terminates.

Now, you can negotiate with the employer to pay for tail coverage. You can say, hey, I’d like you to cover the cost of tail insurance. Now, they may say no. One thing that we’ve had success with is then saying, alright, let’s say you have a three-year initial term. Then you would have one-third of the tail coverage costs forgiven for every year you complete for the employer. So, after the end of three years, then the job employer would agree to pay for the entire amount of the tail insurance policy.

Claims Made or Occurrence Cost for Professional Liability Insurance

Now, if you have the choice, you need to figure out how long you will be with the employer. If you’re going to pay a third more per year, but you’re going to work for the employer for ten years, a claims-made policy probably would make more sense. If you’re only going to work for one year, an occurrence-based policy is a no-brainer. Suppose you have a $3,000 annual premium for a claims-made policy. 

An occurrence-based policy is a third more, so you pay 4,000 for occurrence and 3,000 for claims-made. Let’s say you work for a year. And then, if tail insurance is twice the annual premium, that’s a $6,000 cost. That would be $9,000 total if you had a claims-made policy. Whereas if you had an occurrence-based policy that was $4,000 with no tail insurance, that’s all you’re paying is 4,000.

So, 4,000 versus 9,000, go with the occurrence-based policy. Whereas if you’re going to work for ten years, and let’s say, once again, it’s a $3000 underlying premium. So, 3000 times 10 for the claims-made policy is 30,000. 4,000 times 10 is 40,000 for occurrence. In that scenario, purchasing the claims-made policy would make more sense. If you’re using a claims-made policy, you will come out ahead in the end mathematically.

Which Insurance Policy Is Practical for a Less Than 10-Year Employment?

Now, most people will not work for an employer for ten years. If you choose between the two, it just makes sense to go with the occurrence-based policy, even though it’s a little more expensive per year. Suppose you’re going to work as an independent contractor. In that case, you will likely be responsible for paying the underlying premium and purchasing your tail insurance coverage if you had a claims-made policy. Once again, you have to do the math, alright? Am I going to work for this employer as an independent contractor on a short-term basis? Long-term basis? That type of thing.

Physician Assistant Liability When Covered Under a Medical Doctor 

The tail insurance coverage cost can vary based on how long you’ve worked for that job employer. And then also, your claims history, how long you purchased, and how extended coverage you purchased for the new tail insurance coverage. So, it was a one-year, three-year, five-year, or indefinite, that type of thing. It’s not that complicated when you break it down. Still, it’s certainly not something that most PAs are familiar with regarding the different types of insurance coverage. There is one other small caveat for PAs, and sometimes the physician will have a policy that covers the PAs under them. And so, if a physician assistant leaves, it will just roll into the physician’s policy. I’m not going to get into the details of that. But that is one thing you don’t have as a dentist, a vet, an NP, or PA. So, it’s something to consider.

Contract Concerns Outside of Your Liability Insurance Policy

Can a physician assistant break their contract? The answer is yes. They can. However, if breaking their contract means that they’re breaching it and not adhering to the terms they agreed upon, they may have some legal or financial consequences that you will want to consider before making that decision. So, before you break the contract, there are usually many different ways you can be led out of your contract. You always want to go to your job employment agreement and read it very carefully. There are generally many clauses on termination. Your employer can terminate your agreement for-cause if you have violated some policies, lost your practice license, or were convicted of a crime. There’s usually an enumerated the list there.

Without Cause-Termination

And if any of that happens, your employer will terminate the agreement. Another way you can be let out of your employment agreement is a without-cause termination. Most employment contracts you want to read carefully will have a clause that says you may terminate your employment without-cause. It can be for any reason or no reason after giving a certain amount of notice. The range can be anywhere from 60 to 90 days. Occasionally, if you’re in a rural or high-need area, it can sometimes go up to 120 days. If you want out of your contract, you need to give written notice, which needs to be delivered properly. Again, this can be a little unique to each situation, so you want to look at the employment agreement, and it will state how you need to give proper notice.

How Do You Need to Give Proper Notice?

It’s usually always in writing. It can be hand-delivered to specific personnel. Sometimes it must go through certified mail. Other times you’re able to email it to specific personnel. So, ensure you give your notice correctly and give your notice at the appropriate time. As we discussed, it’s usually 60 to 90 days, and you can be let out of your agreement. That’s the best way to do it. However, even if you do it this way. There might still be some financial consequences if you receive any sign-on bonus, relocation bonus, or reimbursement. Those bonuses are when you’re given a lump sum upfront when starting your employment. Usually require that you complete a certain period with the company. It is usually anywhere from one to three years.