Updated March 2026
Physicians purchasing medical malpractice insurance will almost always encounter two types of policies: claims-made and occurrence coverage. Understanding the difference between these two policy structures is important when evaluating coverage options, changing jobs, or retiring from practice.
While both types of policies protect physicians against malpractice claims, they operate in different ways.
Occurrence Policies
An occurrence policy provides coverage for any incident that occurs during the policy period, regardless of when the claim is actually reported.
For example:
- A physician carries an occurrence policy from 2024 to 2026
- A patient files a lawsuit in 2029
- If the alleged incident occurred in 2025, the policy still responds
Because the coverage is tied to when the medical service occurred, occurrence policies do not require tail coverage when the policy ends.
Advantages of Occurrence Coverage
- No need to purchase tail coverage
- Coverage remains in force for services performed during the policy period
- Policy limits reinstate each year
- Simpler when changing employers
Disadvantages of Occurrence Coverage
- Premiums are typically higher than claims-made policies
- Fewer insurance carriers offer occurrence policies today
Claims-Made Policies
A claims-made policy provides coverage only if two conditions are met:
- The alleged incident occurred after the policy’s retroactive date, and
- The claim is reported while the policy is in force
This means coverage depends on both when the incident occurred and when the claim is reported.
Because of this structure, physicians may need to purchase tail coverage when leaving a claims-made policy.
Example
- Physician carries a claims-made policy from 2024 to 2026
- Leaves the practice in 2026
- A claim is filed in 2028 related to care provided in 2025
If the physician did not purchase tail coverage, or the new insurance carrier did not assume the physician’s retroactive date, there would be no coverage for the claim.
What Is Tail Coverage?
Tail coverage, formally known as an Extended Reporting Period endorsement, allows claims to be reported after a claims-made policy ends.
Tail coverage is commonly required when:
- A physician changes jobs and the new carrier will not assume prior acts.
- A physician leaves a medical group
- A physician retires
- A practice closes
The cost of tail coverage typically ranges from 150% to 250% of the annual premium, although most insurance companies offer free retirement tail coverage once certain age and eligibility requirements are met. Insurance companies also provide free tail coverage for death or disability.
Why Most Physicians Have Claims-Made Policies Today
Although occurrence policies were more common in the past, most physicians today are insured under claims-made policies.
This shift occurred because claims-made policies:
- Allow insurers to price coverage more accurately
- Provide lower upfront premiums
- Are more widely available in the medical malpractice market
As a result, the majority of major malpractice insurers today primarily offer claims-made coverage.
Which Policy Type Is Better?
Both types of policies provide strong protection. The decision typically comes down to cost, availability, and employment arrangements.
In most situations:
- Claims-made policies are more common and cost less initially
- Occurrence policies offer simplicity because no tail coverage is required
When physicians change jobs or join new practices, a very important issue to evaluate is who will be responsible for tail coverage if the policy is claims-made. This should be clearly stated in the physician’s employment agreement.
Final Thoughts
Medical malpractice insurance policies can vary significantly depending on specialty, state, and practice structure. Understanding the difference between claims-made and occurrence coverage can help physicians make better decisions when selecting coverage or reviewing employment agreements.
If you have questions about malpractice insurance options or would like a second opinion on your your current coverage, feel free to contact our office.
Steve Sopyla, CPCU
Sopyla & Associates, LLC
www.sopyla.com
913-648-1651
800-807-8878
About the Author
Steve Sopyla is the owner of Sopyla & Associates, LLC and has specialized exclusively in medical malpractice insurance for physicians, hospitals, and healthcare providers for more than 35 years. He works with physicians across the country to help them secure competitive coverage and navigate complex malpractice insurance issues.