What is AVMA Excess Limit Coverage?: Veterinary Insurance from the AVMA
What is the AVMA excess limit coverage? The AVMA or the American Veterinary Medical Association has what’s called the PLIT, which is the Professional Liability Insurance Trust. And the PLIT offers vets a wide range of different types of insurance. The two most common are the professional liability insurance, also known as malpractice insurance, then they also offer licensing board defense coverage as well, so that if there was some complaint filed with the board, the vet would have an attorney signed to their case and they wouldn’t have to pay anything out of pocket. As far as the underlying coverage, it is exceedingly inexpensive for a vet to have malpractice insurance.
Veterinary Liability Insurance
As an example, a small animal exclusive vet can get covered for $250 per year. And how it works is they do offer different tiers of insurance based upon the limits. Limits are simply how much the insurance company will cover the vet. For instance, if you have 1 million, 3 million coverage, that means you have 1 million per claim, so they’ll cover up to a million dollars per claim, and then they’ll cover up to $3 million on aggregate per year. Meaning, that the total amount of claims paid out can’t exceed 3 million for the entire year. Now, is it likely that a vet would ever have a case with $1 million in damages? Absolutely not. But they still offer that amount. I believe you could get one hundred thousand, three hundred thousand, nine hundred thousand, and then 1 million, 3 million.
Those are the three different levels that can be paid for by the vet. And then as far as prices go, the most expensive is equine only vets. And if you had like a 1 million, 3 million policy, I believe the cost per year to an equine vet would be like 2,500 per year. Now, it’s an occurrence-based policy. That just means a policy has to be in effect when the malpractice incident occurs. There is claims-made insurance for other healthcare professions. In that scenario, you would need tail insurance. And that covers the gap in between when you leave an employer and then the last day somebody can sue you, but for vets who go through the AVMA, this is something you don’t need to worry about.
The AVMA also offers excess limits, meaning, if you have the most expensive policy offered for professional liability insurance, you can also purchase additional coverage that would cover you for an additional amount of money each year. And just to give an example, let’s say you had a 1 million, 3 million policy as a small animal exclusive vet, as I said before, it’s like $250 per year. You could get an additional 1 million, 1 million limit for $106 per year. Is the excess coverage necessary? Probably not. It would be exceedingly rare for any vet to need coverage beyond that. There would have to be some kind of insane catastrophic combination of events to get to a million dollars in damages for malpractice against an animal.
But if you’re not worried about the cost and want to feel more comfortable with additional limits, it’s very affordable. Now, as far as who should pay for your underlying malpractice premiums, the premiums are just what it costs to insure you on an annual basis. If you’re a veterinary associate, the employer absolutely should pay for your underlying premiums for two reasons: one, it’s just industry standard and then two, they’re exceedingly affordable in the veterinary medicine arena compared to others like physicians, NPS, and PAs. It’s just inexpensive compared to those other ones. And so, there’s just no reason that the employer shouldn’t pay for it. Will they pay for kind of the boost and excess limits if that’s something that you’re interested in? maybe, maybe not.
AVMA Excess Limits to Protect Your Veterinary Career
And if they’re not interested in doing that, then there’s no reason that the vet can’t shell out a couple of hundred dollars to feel a little more comfortable about the limits. Once again, probably unnecessary, but it’s there. The veterinary industry, as far as malpractice insurance goes, is very different from almost all of the others because the vast majority of vets use the AVMA PLIT. Whereas let’s just take physicians, for instance, there are hundreds and hundreds of professional liability insurance companies that offer insurance to physicians. There is no kind of one big conglomerate that offers them. It’s really state by state. Whereas if you could have 90% of a profession that uses your insurance, you can offer lower premiums than if you only had like half of 1% or something like that. So, that’s what AVMA PLIT excess limit coverage is. Will you need it? Probably not, but it certainly is there if it’ll make you feel more comfortable.
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