Frequently Asked Questions

Underwriting - Frequently Asked Questions

Claims-Made or Occurrence. The insurance protection afforded by either type of policy is largely the same. The difference lies in how each policy responds to a loss. The following definitions explain this difference:

• A Claims-Made policy responds to a loss if a policy is in force at the time a claim is reported.
• An Occurrence policy responds to a loss if a policy is in force at the time a medical incident occurs.

Because of the difference in how these policies respond to a loss, there is a significant difference in how they are priced, particularly in the first several years:

Claims-Made Policy
The event or peril insured against under a Claims-Made policy is the actual making of the claim. If a claim is made during the Claims-Made policy’s term, then it is covered (pursuant to policy provisions) regardless of when the occurrence took place.

LAMMICO’s Claims-Made policies insure claims made during the policy’s term regardless of the date of the actual occurrence, as long as the occurrence took place on or after the applicable retroactive date. The retroactive date is the earliest date to which the insurance under your policy applies as stated in the Declarations Page and/or Schedule of Insureds and applicable endorsements.

When Claims-Made coverage is initially purchased, the premium charged will be lower than premiums collected for appropriate priced Occurrence policies. The premium charged for the Claims-Made coverage is based upon the possibility that a claim will be made during the year of the premium charge. Claims resulting from professional services are usually not reported during the first year; therefore, the first year’s Claims-Made premium is significantly lower than the following years’ premiums.

This stair-stepping of premium continues for five years until you reach a mature premium. At that point, assuming there are no rate increases, your premium remains stable and you pay the same premium every year thereafter with one significant exception. That exception occurs when you cancel your policy. It is the Reporting Endorsement premium or “Tail.”

Reporting Endorsement (“Tail”)
Claims-Made policies require the purchase of Reporting Endorsements or Tails if coverage is discontinued. This is because the policy only covers claims that are made during the policy’s period. Future claims may arise and be first reported after the termination date of your Claims-Made policy. A Reporting Endorsement or Tail provides insurance for covered losses arising after your retroactive date and reported after your policy’s termination date.

For example, assume that a medical practitioner purchases a Claims-Made policy from LAMMICO for 2019. The policyholder decides not to renew for 2020. LAMMICO is presented with a claim in 2021 for surgery the practitioner performed in 2019. LAMMICO would not defend or indemnify the practitioner unless he or she previously purchased a Reporting Endorsement (Tail).

Occurrence Policy
Occurrence policies insure the occurrence itself, regardless of when the claim is made. As long as a covered loss (occurrence) occurs during the policy period, the Occurrence policy covers the loss, to the extent of the policy’s provisions. For example:

A medical practitioner purchases an Occurrence policy from LAMMICO for 2019. The insured decides not to renew for 2020. LAMMICO is presented with a claim in 2011 for surgery the practitioner performed in 2019. The company will defend the practitioner because the incident occurred during the policy period of 2019, during which the practitioner was insured by LAMMICO.

If the same medical practitioner had performed the surgery in 2020, LAMMICO would not provide coverage for the practitioner because the incident would have occurred after the policy period of 2019, when the practitioner was insured.

Reporting Endorsement (“Tail”)
Occurrence policies do not require extended reporting endorsements, also known as “Tails," if coverage is discontinued. This is because if the insured event occurs during the policy’s period, then coverage under the Occurrence policy applies regardless of when the claim is made.

Important Features of LAMMICO Claims-Made Coverage

Aggregate limit for Reporting Endorsement or “Tail”
A single aggregate will be applied. This means that the policy will afford one maximum amount of insurance to cover all prospective claims that may be brought against a given practitioner.

Changes in Risk Classification
If an insured decides to “step down” from his or her current classification to one rated a lower risk (e.g. step from a surgical to non-surgical practice) then a one-time “step down” charge is required. This one-time charge is designed to cover the continuing exposure of potential claims arising from the prior, higher-rated classification. Then all future premiums will be calculated based on the lower-rated risk classification. The policyholder’s retroactive date remains unchanged.

While the retroactive date of the policy would remain the same as before the risk classification change, the Reporting Endorsement ultimately charged would be based upon the insured’s risk class at the point of termination.

Retirement, Death and Disability (LA, MS, TX)
The LAMMICO policy includes a waiver of the Reporting Endorsement premium if the policyholder dies, becomes permanently disabled, or if the policyholder decides to permanently retire from the practice of medicine while the Claims-Made policy is in force. With respect to the retiring practitioner, he/she must have been with LAMMICO for five years and have attained 50 years of age.

For more information, please contact our Business Development or Underwriting departments at 800.452.2120.

Occurrence policies do not require extended reporting endorsements, also known as “Tails”, if coverage is discontinued. This is because if the insured event occurs during the policy’s period, then coverage under the Occurrence policy applies regardless of when the claim is made.

Claims-Made policies, however, do require the purchase of reporting endorsements or Tails if coverage is discontinued. This is because the policy only covers claims that are made during the policy’s period. Future claims may arise and be first reported after the termination date of your Claims-Made policy. A Reporting Endorsement or Tail provides insurance for covered losses arising after your retroactive date and reported after your policy’s termination date.

Because LAMMICO understands the cost associated with your medical professional liability coverage, we offer several discounts to help make your premium more affordable. We offer the following discounts to qualifying physicians:

Risk Management Premium Discount Program: A 10%, per-provider discount to the basic limits portion of your LAMMICO premium for successfully earning a total of two Risk Management (RM) Credits annually to qualify for the discount. Risk management seminars are offered online and as webinars throughout the year.
New-to-Practice: If you are a newly graduated or soon to be graduated physician or dentist, you may be eligible for a 50 percent credit to your LAMMICO premium for your first 12 months of practice.
Part-Time: If you practice 85 hours or less per month, you may receive a percentage off both your LAMMICO premium and Louisiana Patient's Compensation Fund surcharge.
Deductibles: Insured healthcare providers, hospitals and facilities may receive a credit for retaining a portion of each claim.
Good Experience Credit: A 10% credit to the LAMMICO premium for policyholders who have been with LAMMICO at least five years and have excellent loss experience.

To learn if you and/or your facility qualify for these discounts, please contact your agent or the LAMMICO Underwriting Department at 504.831.3756 or 800.452.2120.

Knowing how much medical professional liability insurance to buy is a complicated issue. You want to be certain that you are receiving maximum protection at the lowest possible cost. When choosing your unique level of coverage, considerations may include:

The amount of risk involved
Your level of available funds
How much you are willing to pay

Please contact your agent or the LAMMICO Underwriting Department at 504.831.3756 or 800.452.2120 if you have questions about your current coverage or would like a premium quote.

According to the Louisiana Patient's Compensation Fund’s website, the purpose of the Patient's Compensation Fund Oversight Board is to guarantee that affordable, medical malpractice coverage is available to all private healthcare providers and to provide a certain, stable source of compensation for legitimate victims of medical malpractice.

For more information regarding the PCF, please visit their website.

If you employ an advanced practice healthcare provider (such as an advanced practice registered nurse or a physician’s assistant), LAMMICO recommends that everyone in your office be insured with the same company.

Louisiana-Specific Insights

The advantages of this are that you will know the limits purchased, that everyone is Louisiana PCF qualified, that you can be sure payments are made on time, and that there are no conflicting provisions under policies by different companies.

If an advanced practice provider (APP) is insured with a different company than our policyholder, you should obtain a Certificate of Insurance from the APP. In Louisiana, LAMMICO strongly recommends that the certificate state that the APP’s insurance company has paid the PCF surcharge to qualify for protection under the cap. If the corporation/entity employs an advanced or allied healthcare provider who is not enrolled in the PCF, a possibility exists that the PCF will not cover the corporation/entity for any liability arising from a claim involving the employed APP and the corporation, unless an additional PCF corporate surcharge is paid. The physician should submit a copy of the APP’s Certificate of Insurance to his/her underwriter at LAMMICO for review.

If you have additional questions, please contact your agent or the LAMMICO Underwriting Department at 504.831.3756 or 800.452.2120.

Your LAMMICO policy only provides coverage for “medical incidents occurring within the issue state.” It is important that you are adequately covered for any exposure you may have regarding telemedicine, especially if you are rendering care to patients outside of the state.

If you are practicing telemedicine, please contact the Underwriting Department at 504.831.3756 or 800.452.2120 so that we can assess your risk and determine whether we can offer an endorsement to your policy to cover out-of-state telemedicine exposure. Additional premiums may apply for out-of-state telemedicine coverage.

LAMMICO wants to ensure that you have appropriate coverage. You can find out by checking on the declarations page of your policy.

It is possible for a claim to be filed against your professional legal entity, in which case you would need corporate coverage. If the professional legal entity is named in a malpractice claim, it must be listed as an additional insured in your policy in order for LAMMICO to provide it with a defense. Please note that in certain situations a premium charge may need to be assessed to assure that your corporate interests are appropriately protected.

If your corporation, clinic, group or partnership is not included on the Schedule of Insureds of your LAMMICO policy, or the policy of one of your co-owners or partners, please contact LAMMICO’s Underwriting Department to discuss submitting an application for coverage.

Louisiana-Specific Information
The Louisiana Patient’s Compensation Fund (PCF) requires that all shareholders, partners, members, agents, officers, or employees of a corporation, partnership, limited liability practice, or limited liability corporation be PCF qualified (having paid the applicable surcharge) in order for the corporation/entity to be qualified without additional charge. Without PCF qualification and coverage, the claim could fall outside of the Louisiana Medical Malpractice Act. That means that a claim against your corporate entity may not be capped under state law, and the PCF may not be responsible for indemnity payments on your behalf.

If the PCF requests information regarding your corporate entity, you must comply to ensure proper coverage with both LAMMICO and the PCF, even if the corporate entity has been dissolved. Failure to respond could result in the PCF determining that your corporation is not enrolled. Also, LAMMICO may not be able to provide coverage for a non-enrolled corporate entity.

LAMMICO is committed to ensuring that you have the necessary coverage to protect yourself and your corporation. If you have any questions, please contact your agent or our Underwriting Department at 800.452.2120 or 504.831.3756.

The PCF requires a completed LPCF Corporation Application to be submitted every year, upon renewal, for each corporation, partnership, limited liability practice, or limited liability corporation.

A copy of the Louisiana Patient’s Compensation Fund Corporation Application and instructions for completion can be obtained from the Louisiana Division of Administration’s website.

For further information regarding requests from the PCF, contact the PCF at 225.342.8788 or fax your information to 225.342.8904.

With 40 years of experience in preventing and managing medical professional liability claims, LAMMICO has extensive knowledge of the legal and legislative environments and utilizes attorneys who are experts in defending hospitals and healthcare facilities.

Facilities that may qualify for coverage include:

Insuring your facility with LAMMICO provides you with more than just an insurance policy. You are becoming a policyholder of the company trusted by thousands of healthcare providers for their individual medical professional liability needs. Some of the benefits of insuring your facility with LAMMICO include:

Avoidance of potential disputes in the event of a claim. LAMMICO has the interest of both you and your facility in mind from the moment of policy inception through claim resolution.
As a physician-owned insurer, LAMMICO understands your unique needs.
A long-term commitment to you and your facility.
Convenience of facility and individual professional liability insurance provided through one, trusted carrier. With one call, you can discuss options and details about both policies.

For more information on facility coverage, contact your agent or the LAMMICO Underwriting Department at 800.452.2120 or 504.831.3756.

LAMMICO selected Imperial PFS (IPFS) as our online payment solution. IPFS offers the flexibility to pay premiums (and Louisiana Patient’s Compensation Fund surcharge for Louisiana insureds) in full or select a payment plan. To learn more about using IPFS, visit lammico.com/IPFS.

You can access premium financing and online payment through IPFS by logging in as a Member at lammico.com/login and selecting “Online Payment” in the drop-down menu under your name. There you can also view your invoice balance due.

The information provided on this site is distributed for informational purposes only. It is not intended to constitute legal advice. Visitors are urged to consult with their own counsel concerning the matters presented.