Why Veterinarians Do Not Need Tail Insurance
Why veterinarians do not need tail insurance. Now, this is not a funny pun. This is an actual type of insurance that’s utilized through most medical and healthcare-related professions. However, when it comes to veterinarians, they generally do not need it. And for the following reasons. Well, first, nearly all veterinarians get their professional liability insurance from one place. And that’s the AVMA. The AVMA has a professional liability insurance trust or the PLIT. And then through that, they offer professional liability insurance to veterinarians based upon specialty, and the type of insurance that they use is called occurrence-based insurance. Occurrence-based insurance simply means a policy has to be in effect when the malpractice occurs.
Whereas with a claims-made policy, a policy has to be in effect when the claim is actually made. And it’s possible that a vet could leave an employer and then someone could sue them after the fact, and if they are sued after they leave an employer, there has to be an additional policy that kind of covers the gap in between their last day with the employer and then the last day somebody can sue them. Because AVMA offers an occurrence-based policy, veterinarians simply do not need tail insurance. Now, why would someone choose occurrence over tail? Well, cost. Generally, occurrence-based insurance is about a third more expensive than claims-made coverage. However, if you have a claims-made policy and you have to purchase tail insurance, tail is usually around twice what your annual premium is.
For vets, malpractice insurance is exceedingly less expensive than almost any of the other healthcare professions. Just to give you an example, a small animal exclusive policy with limits of 900,000 is only $213. It’s very, very small. Just as an example, a family practice physician, their annual premium is usually going to be somewhere between 6,000 to 8,000 a year. And what I just said, like a small animal exclusive vet is going to be $200 a year. It’s such a small amount that’s why they utilize occurrence-based insurance.
Why is it so small? Well, it’s just based upon risk. Simply the damages for malpractice action against a pet are extraordinarily smaller than the damages of, let’s say, an OB-GYN committing malpractice against a baby. The damages are generally from the expected lifetime of a patient. And so, it’s just much smaller for an animal. It’s really not something that most vets should worry about. I mean, obviously, you’re going to have a malpractice policy and if you’re a veterinary associate employed with a veterinary practice, they’re going to pay for that, or at least they should pay for that underlying premium. The only specialty that I would just say is relatively expensive would be predominantly equine vets. An equine policy with the same limits, as I mentioned before, could be around $2,000 a year.
Not inexpensive, but also not going to break the bank for someone who does predominantly equine animal work. That is why a vet does not need tail insurance. Certainly, when I’m talking to vets, if it comes up, there’s always a chuckle just because it sounds kind of silly, but that’s how it’s known across the industry. And that’s why I wanted to do a brief discussion of that. I find vets really have a lack of understanding of liability insurance. So, it’s always like a good exercise to kind of go through, alright, here’s what occurrence-based coverage is, here’s what claims made is, here’s what tail, here’s what normal limits are for you. And then to just have a brief discussion of the risk and that type of thing.
The AVMA PLIT also offers licensing board defense for a small fee, and every vet should seriously consider adding that to their underlying malpractice coverage.
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