Claims Made/Occurrence Policy Overview

Understanding the Difference

We strive to help you make informed decisions that keep you in control. Understanding the difference between a claims-made and an occurrence policy is just one of the ways we succeed.

Two Choices
Claims-made and occurrence policies are the two primary forms of professional liability insurance on the market today. Both policy forms provide appropriate, quality protection against allegations of malpractice.

Claims Made

Policy Period
Claims-made policies are generally in force for one year at a time and can be renewed without interrupting coverage. Each successive policy replaces the previous one and covers an increasing time period. The policy provides coverage for claims that are filed (i.e., reported) during that policy period, regardless of when the incident occurred, provided it was after the original inception date of the initial claims-made coverage (retroactive date).

Premiums
Often called "pay as you go" insurance, claims-made coverage is based on your individual risk exposure, with the policy reaching maturity (full premium) over a five-year period in most states. Because most policyholders will not have claims that both occur and are reported during the first policy year, the first year's claims-made premium is substantially less than that of an occurrence policy. In the second year, it is a little more likely that the policyholder may report a claim, so the premium increases over the first year, and "steps" up until the fifth year, at which point it is close to the same amount as an occurrence premium.

Coverage and Liability Limits
Limits are provided in accordance with the stipulated terms and conditions of the policy.

Termination
Policyholders canceling a claims-made policy may obtain "tail" coverage, also known as an extended reporting endorsement. Adding tail coverage to a claims-made policy effectively converts it to occurrence coverage because it protects you against claims related to services performed during the original policy period but reported after your initial coverage expired. Or, you may obtain prior acts endorsement from a new insurance carrier, which accomplishes the same result.

Occurrence

Policy Period
Occurrence policies are generally written for one-year terms and can be renewed without interrupting coverage. Each policy period is controlled by effective and expiration dates. This form of coverage responds to incidents that occur during a policy year and subsequently result in a claim, regardless of when the claim is reported.

Premiums
Occurrence premiums are not "step-rated" like claims-made premiums. Because an insurance carrier does not know how many incidents will give rise to claims or when those claims will be reported, the premium in all occurrence policies must be high enough from the very beginning of the policy to cover claims that might not be reported until many years later.

Coverage and Liability Limits
Limits are provided in accordance with the stipulated terms and conditions of the policy.

Termination
An occurrence policy permanently insures the period of time when coverage was in effect. When the policy expires, any incidents that may have occurred between the effective and expiration dates will be covered forever, regardless of when a claim may be filed.

At Your Service

Shopping for professional liability insurance can be a little overwhelming—so many important details to understand and coverages to consider. If you would like to discuss which type of policy best suits your needs, please contact your authorized agent at 866-442-3810 or through our on-line contact form for more information about claims-made and occurrence policies.

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Frequently Asked Questions by Policyholders

1. Whom do I call with questions regarding my coverage?
   Call your Wisconsin Medical Society Insurance and Financial Services agent first if you have a question about your coverage or need to report a change in your coverage. The agent's experience, along with the expertise of PlC Wisconsin staff, ensures that we are able to meet your customer service needs.
2. What are my obligations as a policyholder?
   Each policyholder has several duties, for instance:
   • You must report a claim or legal action against you as soon as reasonably possible and provide us with any related documents you receive. The time period for reporting a claim is determined by your policy type (claims-made or occurrence).
   • You must notify PIC Wisconsin within 30 days of any changes in your practice, specialty or professional association. You must also notify PIC Wisconsin within five days of any action affecting your license to provide professional healthcare services.
   (Refer to Section H of your policy for a complete list of duties.)
3. What is my proof of insurance?
   Depending on the type of policy you have, you'll receive proof in the form of either a declarations page, coverage summary or certificate of insurance. This proof of insurance is delivered with your annual invoice. Please contact your agent should you need an additional copy.
4. I did not inform you of a practice change prior to receiving my invoice; Will you reissue my invoice?
   Any changes that will result in a change in premium must be received before we issue your annual or installment invoice. Changes received after that will be reflected on the remaining installment invoices for the policy period. To prevent a lapse in coverage, please pay the minimum due on the invoice.
5. What is tail coverage and do I need to purchase it?
   Policyholders canceling a claims-made policy may obtain "tail coverage," also known as an extended reporting endorsement. Adding tail coverage to a claims-made policy protects you against claims related to services you performed on or after the retroactive date and before the cancellation date. Or, you may obtain a prior acts endorsement from a new insurance carrier.
6. What is your policy coverage in the event of death, disability or retirement?
   With PlC Wisconsin, you are entitled to receive an unlimited extended reporting endorsement at no cost if the following apply:
   • You become totally and permanently disabled and fully retire from practice as a result of physical or mental injury, sickness or disease during the policy period.
   • In the event of your death during the policy period.
   • You fully retire from practice during the policy period after having five years of continuous coverage with us.
   (Refer to your policy for all requirements of this benefit.)
7. Are all claims made against me reportable to my state licensing board and the National Practitioner Data Bank?
   All indemnity payments are reportable to the National Practitioner Data Bank, regardless of the amount of payment. State licensing boards vary on reporting requirements for nominal payments.
8. Do reported claims affect my premium?
   When determining your premium PIC Wisconsin reviews many criteria including specialty, procedures performed, practice location, organizational affiliations and claims history. Reported claims are an integral piece in determining premium, but do not automatically affect your premium.
9. Am I covered for services I provide outside my home state?
   You are covered anywhere in the world, as long as the legal action and proceedings occur within the United States, its territories or possessions, Puerto Rico or Canada. You must be licensed in the state or country where the services (including telemedicine) are performed. For example, if you practice in Wisconsin and prescribe medication to a patient in California, you must be licensed in both states. Emergency and training situations are exceptions to this requirement. You should notify your agent if the majority of your practice is conducted outside your home state or if you are going to be practicing abroad.

These are just some of the more commonly asked questions. If you have others, please contact us through our on-line contact form.

Please refer to your policy and applicable endorsements for terms, conditions and exclusions of coverage.

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Injured Patients and Families Compensation Fund (IPFCF)

The Patients Compensation Fund (PCF) was established in 1975 by Wis Stat 655 to provide excess professional medical liability insurance coverage above primary insurance requirements for Wisconsin healthcare providers. The fund provides professional liability occurrence coverage for healthcare providers permanently practicing in Wisconsin. The PCF currently pays that portion of medical professional liability claims in excess of $1,000,000 for each occurrence and $3,000,000 for all occurrences in any one policy year.

The fund operates on a July 1 through June 30 fiscal year. Administrative and operating costs and claims payments are funded through assessments paid by participating health-care providers. The fund is managed by a 13-member board of governors consisting of:

• Three insurance industry representatives
• One representative named by the Wisconsin Academy of Trial Lawyers
• One representative named by the State Bar Association
• Two representatives of the Wisconsin State Medical Society
• One representative named by the Wisconsin Hospital Association
• Four public representatives appointed by the Governor
• The Commissioner of Insurance, who serves as the Chairperson

The fund's board of governors is assisted in its duties by the Underwriting and Actuarial Committee, Legal, Claims, Investment/Finance and Audit, and Risk Management Committees, as well as the Peer Review Council.

Chapter 655 sets forth the obligations and benefits that apply to healthcare providers defined in the law. Defined healthcare providers must participate in the fund and pay fund assessments. The personal liability of a healthcare provider who complies with the requirements of this statute for acts of malpractice is limited to the mandatory insurance limits required by law. The PCF pays damages in excess of $1,000,000/$3,000,000 and in accordance with Chapter 655 provisions.

Mandatory Insurance Requirements

Chapter 655 also delineates insurance requirements that must be met by healthcare providers. The requirements are described in the statute as follows:

Every healthcare provider permanently practicing or operating in this state either shall insure and keep insured the healthcare provider's liability by a policy of healthcare liability insurance issued by a Wisconsin-licensed insurer, or through a self-insurance plan approved by the Commissioner of Insurance.

Permanently practicing in this state means the full-or part-time practice in this state of a healthcare providers' profession for more than 240 hours in any fund fiscal year by a provider whose principal place of practice is in Wisconsin.

Principal place of practice means that during the fiscal year the provider will derive more than 50 percent of their income from practice in Wisconsin or will attend to more than 50 percent of his or her patients inside the State of Wisconsin.

Every healthcare provider subject to the law must have medical malpractice insurance protection of at least $1,000,000 per occurrence and $3,000,000 per policy year.

Every healthcare provider subject to the law must pay an assessment fee to the fund. A provider may be subject to an individual surcharge of fund fees based upon individual claims experience if recommended by the fund's Peer Review Council.

Compliance

Providers required to participate in the fund must obtain a primary professional liability insurance policy from a Wisconsin-licensed insurer or through an approved self-insurance plan, with limits equal to the statutory requirements to coincide with the date(s) of practice. Once a provider has obtained this coverage, the following events should occur:

• Within 45 days of the issuance or binding of the policy the insurer or approved self-insurer shall file a certificate of insurance, on behalf of the provider, with the fund.
• The fund will record this certificate and it will be used to produce assessment bills.
• Upon receipt of the fund assessment bills, a provider must pay the fund bill by the due date for payment.

Certain healthcare providers may claim an exemption from the fund. A provider who claims an exemption is not protected by the fund and may be personally liable for damages awarded for malpractice.

Sections of this document were excerpted from a May 1992 Special Supplement to HRM Notes, "Office of the Commissioner of Insurance Patients Compensation Fund Provides Medical Malpractice Insurance Services," and from the January 1990 edition of a Wisconsin Medical Journal article, "Wisconsin's Patients Compensation Fund: An Overview," by Kay Hutchinson.

For more information, visit http://oci.wi.gov/pcf.htm or contact us through our on-line contact form.

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Member Benefit Program Overview

Health care professionals choose PIC WISCONSIN for their professional liability insurance for a number of good reasons, including PIC WISCONSIN's creative approach to managing risk, financial strength and stability. These same qualities attract health care associations as well. In 1998, the Wisconsin Medical Society and PIC WISCONSIN jointly created the Member Benefit Program. PIC WISCONSIN is honored to be associated with an organization so committed to supporting and protecting members of the medical community. PIC WISCONSIN shares and supports these ideals.

Designed to reward the exceptional loss history of Wisconsin Medical Society members, the Member Benefit Program offers participants a variety of exclusive benefits including:

Affinity Discount
You'll have an opportunity to receive a 7.5% discount off your PIC WISCONSIN medical professional liability premium after all other discounts are applied. Please note that this discount is not available to actuarially-rated accounts, which are rated based on individual risk exposure and loss experience. In addition, Program participants receive a 25% discount off their corporate coverage premium.

Member Benefit Coverages
As a Wisconsin Medical Society member in good standing, you will receive the following additional coverages from PIC WISCONSIN:

• Medicare/Medicaid Billing Errors & Omissions – Medical Records Confidentiality provides a newly increased coverage limit of $50,000 for this coverage for the policyholder. Insured professionals share in this limit with the policyholder. The following is covered under the endorsement, subject to conditions of coverage being met:
  • Defense and investigation costs associated with government investigations into Medicare/Medicaid billing violations
  • Defense costs resulting from privacy incidents
• Contingent Excess Liability Coverage provides coverage should the Injured Patients & Families Compensation Fund deny coverage for damages you are obligated to pay in excess of PIC WISCONSIN’s $1,000,000/$3,000,000 coverage limit. This endorsement provides additional coverage up to $1,000,000 per policy year.
• Contractual Liability Coverage covers damages resulting from professional health care services you provide and that you may be obligated to pay under an agreement or contract. The agreement or contract may be with a health maintenance organization, preferred provider organization or other managed care organization. Coverage does not include fines or penalties. This coverage will share in your professional liability limit.
• Legal Expense Coverage. Provided no claims have been made directly against you, PIC WISCONSIN will pay for legal expenses you incur for interviews, hearings or depositions about professional health care services you provide. You also receive coverage for legal services associated with disciplinary proceedings or hearings brought against you by a governmental or peer review board. Please refer to the policy for details of this coverage. As a participant in the Member Benefit Program, you receive an increased limit of $25,000 for legal expense coverage. A PIC standard policy owner only has a limit of $5,000.
• First Aid Coverage. Program participants receive First Aid Expense Coverage at no additional charge. This coverage provides a limit of $5,000 for first aid expenses you are not legally obligated to pay as a result of negligence.

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Member Benefit Program Eligibility Requirements
To receive the many benefits of the Member Benefit Program, you must be a member of the Wisconsin Medical Society practicing in the state of Wisconsin at the time your policy is issued or renewed.

For Program benefits to apply to PIC WISCONSIN's group practice policyholders, all members of the practice and all affiliated physicians must be insured by PIC WISCONSIN, and they must be members in good standing of the Wisconsin Medical Society.

The Member Benefit Program offers you the security and prestige you deserve as a PIC WISCONSIN policyholder and a Wisconsin Medical Society member.

If you have any questions or need more information on the Member Benefit Program, please contact your authorized agent or Wisconsin Medical Society Insurance and Financial Services at 866-442-3810, or contact us through our on-line contact form.

Note: Please refer to your policy and applicable endorsements for terms, conditions and exclusions of coverage.

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Who is PIC WISCONSIN?

The Wisconsin Medical Society founded PIC WISCONSIN nearly two decades ago in an effort to improve the availability of insurance and to stabilize premium costs. Today, thousands of healthcare professionals and facilities benefit from the visionary efforts of PIC's founding Directors. And every day, that tradition of leading through ingenuity continues to provide strength and security to PIC policyholders.

PIC WISCONSIN has increased its strength, combining forces with the ProAssurance Group—the fourth largest writer of professional liability insurance in the nation.

For the insured, this means unparalleled support. PIC's timely service will continue to help you through difficult times. And our substantial resources ensure that your claim will have the attention of top-quality professionals who listen to you, keep you informed, and resolve your claim in the best manner possible.

Growing from our roots as doctor-founded carriers, we continue to stand by the mission we established over 25 years ago: to provide our doctors with the best protection and service in the industry.

To learn more, contact us through our on-line contact form.