Your guide to professional liability insurance for acupuncturists

Types of professional liability insurance

Professional liability coverage is available in two types: occurrence coverage and claims-made coverage.

With an occurrence policy, a claim will always be covered as long as the event causing the claim happened during the policy period. For an occurrence policy, it makes no difference when the claim is reported.

Claims-made coverage is more complex than occurrence coverage. Just as with occurrence coverage, the event causing the claim must happen during the policy period. Unlike occurrence coverage however, the claim must also be reported during the claims-made policy period if it’s going to be covered. When a claims-made policy ends, the policyholder has the option to purchase an Extended Reporting Period endorsement (also called a “tail”) which gives the policyholder additional time in which to report claims that happened during the policy period. If the policyholder does not purchase a  “tail,” then no coverage is available under the claims-made policy.

Claims-made polices are best suited for those professions where claim severity is the norm. Since that is not usually the case for acupuncturists, occurrence coverage should always be the first choice.

Limits of liability

Every professional liability insurance policy has two sets of limits. The first limit reflects the amount the insurance company will pay out on any one claim. The second limit is the total aggregate amount the insurance company will pay out over the annual policy period.

In most states, when an acupuncturist must provide his or her own professional liability coverage, the usual and customary limits of liability are $1,000,000 per occurrence and $3,000,000 aggregate. If a policyholder has a $700,000 claim, the claim would be covered if the per occurrence policy limit is $1,000,000. With a $3,000,000 aggregate, the aggregate would be reduced to $2,300,000 by a $700,000 claim.

If you are purchasing your own policy, only you can erode your limits of liability. If your employer or facility provides your coverage, you may not have your own separate limits of liability; you may be sharing limits of liability with all of the other providers covered under your employer’s policy. If that’s the case, you could be left without coverage if the claims of the others on the policy erode away the aggregate limit.

Coverage Extensions and Limitations

Deductibles

Insurance policies for acupuncturists normally do not have a deductible. The financial impact of having a policy with a deductible can be significant. If you ever have a claim, you are going to have some expenses you neither planned nor budgeted for. Even if there is no payment made to the patient/claimant/plaintiff in the end, there will always be legal expenses and you will have to share in those expenses if you have a policy with a deductible. It is important to note that a deductible is normally charged each and every time there is a claim. As such, the potential costs related to the deductible should be considered when calculating the true cost of an insurance policy. An insurance policy with a deductible should only be considered as a last resort.

Consent to Settle

You should select an insurance policy that requires your consent before the insurance company settles any claim on your behalf. The broadest Consent to Settle wording in an insurance policy would read like this: “The insurance company will not settle any claim without your consent.” This wording is simple, straightforward and has no limitations.

The ability of an insurance company to settle a claim on your behalf without your consent could have a significant impact on your professional future. If a claim is paid out against you, by law it must be reported to the National Practitioner Data Bank (NPDB). This information could affect not only your reputation, but your ability to practice in the future.

Administrative/disciplinary hearings

This policy extension provides coverage for any legal expenses you might incur regarding a license complaint or administrative review by a regulatory authority. This coverage will pay for attorney fees for investigation and defense as well as travel, food, lodging and wage loss if necessary.

Deposition representation

Should you be required to give a deposition for a claim you are not a party to, this coverage will pay for your legal preparation for a deposition when you receive a subpoena for documents or testimony arising out of professional services. Having this coverage could prevent you from being drawn into a claim.

HIPAA proceeding expense

This coverage extension will pay up to the HIPAA Proceeding Expense Limit, for your expenses from the investigation or defense of a HIPAA Proceeding.

Please note, HIPAA fines and penalties do not include fines and penalties imposed for a knowingly wrongful disclosure of individually identifiable health information.

Defendant expense

This coverage extension will reimburse you for expenses such a travel, food, lodging and wage loss when you are required to attend a trial, hearing or proceeding arising from a covered claim.

Insurance Company Considerations

The very first thing you should consider about an insurance company is its financial stability. You want to be certain that the company will be around to pay claims both today and in the future.

The definitive source for financial information on insurance companies is Best’s Insurance Reports. The AM Best Company was the first insurance rating organization (founded in 1899) and is recognized as the industry leader. Best is independent and receives no funding from insurance companies.

Best rates insurance companies on the basis of their ability to pay claims. Outlined below are Best’s ratings for insurance companies that are considered secure:

• Superior: A++, A+
• Excellent A, A-
• Very Good B++, B+

Unless you absolutely have no other options, you should never buy an insurance policy from an insurance company that is unrated by AM Best. If at all possible, you should also avoid insurance companies with Best ratings lower than B+.

Do acupuncturists need to purchase their own professional liability insurance to supplement the coverage provided by their employers?

The answer is YES—for many compelling reasons. The most important reason is because your own policy will provide you with legal representation when a claim is made against you. If you rely solely upon your employer’s malpractice insurance, you may have little or no say in how that claim is handled. Even if you didn’t cause or contribute to the patient’s adverse outcome, your employer’s insurance company may choose to settle the claim without seeking your consent or even informing you of settlement offers.

The coverage offered through Meri Insurance will provide acupuncturists with security and peace of mind knowing that their interests and professional reputation will not be compromised in order to settle a claim.

 Policy highlights

• Covers legal representation to protect you, your interests, and your reputation.
• Unlimited legal defense costs.
• Occurrence policy: Claims occurring during the policy period will always be covered no matter when they are reported. With occurrence coverage, no “tail” ever needs to be purchased.
• Your policy: Take it with you to your next job. If you do change jobs, the policy will continue to protect you from any claims that might arise from your old job.
• “Consent to Settle” provision: Your consent is required before any claim can be settled under this policy.
• No deductible—no out-of-pocket expenses if a claim is made against you.
• Additional coverage extensions include:
  • Administrative/Disciplinary Hearings
  • Deposition Representation
  • Information Privacy (HIPAA)
  • Defendant Expense Coverage