As with all professions, there are times when it is best to leave and pursue a new working relationship for whatever reason. In the physician world, a change can come with a hefty price tag. That is because malpractice insurance should not or in some cases cannot end on your last day of work.
So who is responsible for the cost of continuing the insurance plan after you leave? In most cases, it’s you. Now, what sort of amount are we talking about? It can be anything from $10k to over $200k depending on specialty, history, location and overall claims experience by the group.
When we say ‘professional liability insurance’ we are referring to malpractice insurance. It’s a benefit that most doctors are provided while employed but it then terminates once they leave. There are two types of malpractice insurance. Claims based or occurrence based coverage. Most employers have claims based which only covers you while working within the organization. Once you leave it ends…but the risk of being sued does not. In light of this, another 2-4 years of protection is necessary. Who picks up this cost? Normally you have to. And this is what you’ve probably heard of before. It’s called tail coverage.
If you find yourself in this situation, it’s best to at least know how much you should be saving up for this going away gift or shall we say expense.
If you’re about to enter into a new agreement it’s better to approach the situation with a strategy of getting the employer to pick up all, half or at least some of the cost. One way you can address it is by saying ‘whoever is responsible for termination is going to pick up the cost’. That doesn’t remove 100% of the liability to you, but it is better. Another thing you can do is say, “the longer you stay there the more the employer picks up.” You could go at it with a straight up 50/50 sharing of the cost. At the end of the day, you should have a conversation with them about it because in more than 80% of the cases that we negotiate, we are finding employers are willing to change and offer something more favorable. If you have nothing to do with termination you should not be responsible for 100% of this cost.
The other type of malpractice insurance is called occurrence based. This actual covers you any time the claim occurs, even after you’re gone. There is much more risk taken on by this type of policy which is why most employers don’t offer it.
A question we often get asked is, “can I just ask my new employer to give me occurrence based coverage so that this risk is addressed?” The answer is usually no because this is a group benefit change and it would require everyone to get a new policy at an entirely new cost which we’ve seldom seen an employer do.
Whatever the case may be…know what you have or what you’re going to get. Have an action plan to address it. The earlier the better and know that it is OK to have the conversation and you are not the only one doing it. We hit this topic with every contract negotiation we do and the worst kind of response we’ve gotten is that they say “No.” It’s worth a shot and it makes the transition to a new organization much smoother.