Malpractice Insurance for CRNAs: Occurrence or Claims-Made

For CRNAs/nurse anesthesiologists, malpractice insurance is generally available in two forms: occurrence and claims-made. Understanding the differences between these coverage types is essential when selecting professional liability insurance.

Occurrence Coverage

Occurrence coverage is often easier to understand. Similar to homeowners or automobile liability insurance, occurrence coverage protects you for incidents that occur while the policy is in force, regardless of when a claim is reported.

Claims-Made Coverage

Claims-made malpractice insurance was introduced in the 1960s as a way for insurers to better manage long-term claim exposure. Because of its complexity and the potential for significant claims, claims-made coverage is typically offered only to medical professionals.

Key Differences Between Occurrence and Claims-Made Policies

There are three primary differences: how coverage is triggered, how limits of liability apply, and how premiums are charged.

Coverage Trigger

An occurrence policy covers incidents that take place while the policy is active and allows an unlimited period of time to report claims. Coverage remains in place even after the policy expires or is canceled.

A claims-made policy requires that both the incident and the claim occur while the policy is active. Claims reported after coverage ends are not covered unless a tail endorsement is purchased.

Tail Coverage

When claims-made coverage ends, the policyholder may purchase a tail endorsement, which provides additional time to report claims. If coverage is provided by an employer, it is important to confirm who is responsible for purchasing the tail.

Limits of Liability

Occurrence policies provide a new set of limits for each policy year. For example, a policy with $1 million per claim and $3 million aggregate limits provides fresh limits annually.

Claims-made policies are continuous, meaning the aggregate limit does not increase over time regardless of how many years the policy remains in force.

Premiums

Occurrence premiums typically remain stable over time. Claims-made premiums start lower and increase gradually over several years as exposure grows.

Although claims-made premiums may appear less expensive initially, the escalating annual premiums as well as the cost of tail coverage should be considered when comparing total costs.