5 Things Psychiatrists Should Avoid When Buying Malpractice Insurance

You have insurance coverage.

You received the lowest rate and have the certificate of insurance.

You are properly insured, right?

Perhaps not.

Here are five of the most common issues you should avoid when choosing a policy.

 1. Not having enough licensing board defense coverage.

PRMS is seeing increased licensing board activity for many reasons such as aggressive boards, greater public attention, easy online access for the public to make complaints and the state’s obligation to investigate all complaints.

Some policies include a basic limit to defend against a board investigation and then charge more if you want higher limits.  PRMS knows the importance of protecting your license and reputation so our policy includes a separate limit up to $150,000 at no additional charge. 

 2. Only one policy type to select from.

Some companies only offer claims-made policies.  However, PRMS offers you a choice.  There are two common policies to consider.

Claims-Made:  This policy protects you in a practice-related legal proceeding if the policy is active when the “claim” is “made” against you during the policy period.  The limits of liability in effect at the time the legal proceeding is made will apply.  If you cancel your policy, you cannot report legal proceedings and should consider additional coverage to extend the reporting period – this is commonly called tail coverage. 

Occurrence:  This policy protects you in a practice-related legal proceeding if the policy was active at the time the treatment or incident occurred, regardless of when the lawsuit is filed.  You don’t need to buy tail coverage with an occurrence policy. 

We will explain your options so you can decide what works best.  Also, PRMS waives tail coverage costs in certain cases such as retirement, longevity with the program, death or permanent disability. Learn more about tail coverage here.

 3. Speaking of tail, some insurance companies have limited options for waiving tail coverage costs.

Tail coverage can be expensive.  The good news is that if you have a claims-made policy with another company, you do not need to buy your insurer’s tail because you may transfer your retroactive date to a policy through PRMS.  

Some companies waive tail costs only if you retire, become permanently disabled or die.  PRMS also waives tail costs for those reasons (retirement means permanent retirement after 5 years’ continuous coverage at age 55+).  However, we also waive tail costs if you maintain a claims-made policy for 10 consecutive years (presuming you are claim free or had no surcharges for claims on your policy).  In most states, we count your previous companies’ claims-made policy years toward the 10-year rule.

 4. Choosing an insurance company with risk management services not specifically designed for mental health.

Other companies usually comingle psychiatry rates and policies with other specialties. In terms of risk management advice, multi-specialty companies can generalize their educational material focused on primary care physicians/surgeons due to their large numbers and higher risk.  As a result, you may not receive enough advice for mental health.

PRMS policies and services are designed for psychiatrists and groups of psychiatrists with allied behavioral healthcare providers.  We are committed to psychiatry-specific risk management services.  We believe risk management – and complimentary access to information and CMEs (PRMS is ACCME accredited) – are essential.  Our advice is based on our superior experience in managing psychiatric claims, lawsuits and significant events for over 30 years as well as addressing about 70,000 psychiatric risk management questions and issues.

 5. Selecting an insurance company that doesn’t have psychiatric claims experience.

At the end of the day, it is about results. Will your company be there for you and act in your best interest when a claim is brought against you?  Do they normally manage psychiatry claims?  Does your company outsource claims defense?

In the over 30 years of our program’s existence, we have managed all claims in-house (no outsourcing).  Also, most of our clients’ claims are dismissed.

Choosing the right malpractice insurance can be a complicated and confusing process, but we are here to help you avoid these and other common pitfalls.

To ask a question or get a personalized rate indication, contact us at (800) 245-3333 or TheProgram@prms.com.


The content of this article (“Content”) is for informational purposes only. The Content is not intended to be a substitute for professional legal advice or judgment, or for other professional advice.  Always seek the advice of your attorney with any questions you may have regarding the Content.  Never disregard professional legal advice or delay in seeking it because of the Content.

©2018 Professional Risk Management Services, Inc. (PRMS). All rights reserved.

Actual terms, coverages, conditions and exclusions may vary by state. Insurance coverage provided by Fair American Insurance and Reinsurance Company (NAIC 35157). FAIRCO is an authorized carrier in California, ID number 3175-7.

AAGP – Supporting the Future of a Specialty

It had been cold and rainy in Washington, DC when my colleague, Remy Palmer, RPLU, and I left for the American Association for Geriatric Psychiatry (AAGP) meeting in Hawaii this past March. Our long plane ride was worth it, not only for the warm weather of Honolulu, but to also catch up with several long-time PRMS clients and make new friends in the field of geriatric psychiatry. The tropical winds were a nice change of pace for us and having the evening reception outside so we could watch the sunset was a stroke of genius by the organizers. We were thrilled to be there, as this year PRMS was the first corporate sponsor to help fund the AAGP Scholars Program for psychiatry residents and medical students. When we were asked for support, we did not hesitate. Not only does this program provide funding for medical students and psychiatry residents to attend the AAGP Annual Meeting, but it also provides a specific educational program geared to trainees during the meeting.

AAGP is faced with meeting the challenge of an expanding population of older Americans and growing the geriatric psychiatric specialty to meet that population’s needs. For over 30 years, PRMS has supported psychiatry on many levels including a focus on residents and initiatives such as the Scholars Program that provides attention to psychiatric specialties. We had the opportunity to meet with the scholars we supported and learned that without our sponsorship they would not have been able to attend the meeting. Other residents commented that the AAGP Scholars Program support and education enhanced their decision to ultimately choose geriatric psychiatry as their specialty.

Next year the theme of the 2019 AAGP meeting will be “Preparing and Partnering for the Future of Geriatric Mental Health.” PRMS will be there once again to support this mission and the future of this specialty. We look forward to seeing you in Atlanta!

Megan Jones is Head of Strategic Product and Sales Analytics and joined PRMS in 1997.

Preparing for Private Practice

Starting or joining a private practice is an exciting time, but it can also be risky.  An essential way to protect your professional reputation and reduce risk is to obtain comprehensive medical professional liability insurance. In this post I will address some important steps you can take to help create and maintain a successful practice.

Build good relationships

If you are entering into, or are already in, a private practice, you should forge and maintain relationships with an experienced risk manager, colleague, attorney, accountant, professional organization and trusted insurance professional.  PRMS licensed insurance professionals utilize extensive experience to provide sound advice to cover your risks and explain complex insurance options.

Cover your psychiatry services

Medical professional liability policies and risk management consultation can be generic for all specialties.  But your practice is not generic – and neither is our program.  This is why our policy, in addition to covering for standard psychiatric treatments, also covers services such as telepsychiatry, evaluations, forensic psychiatry (e.g., expert testimony), Peer or Utilization Review, routine medical care incidental to psychiatry services, publications, teaching, clinical trials and emergency medical treatment without the expectation of compensation.

Know your risk tolerance

Each time you contemplate the range of options between the “floor” of the standard of care and optimal care, it is imperative that you not only identify and evaluate the associated risks, but also recognize your tolerance for those risks. PRMS clients have complimentary access to risk managers who will advise you and help lower your risk.

You can read more about preparing for a private practice here.  Contact us to start building a trusted relationship with an insurance professional by calling 800-245-333 or emailing TheProgram@prms.com.