Medical malpractice cover is a short-term insurance policy. The policy runs for a specified period of time (usually 12 months) and then lapses automatically if not renewed. When you renew a policy, the new policy would only pick up the retroactive [backdated] if there is no gap in cover between the two policies.
The policy that you have in place on the day a claim is made against you or when you become aware of an incident or circumstance which could give rise to a claim or complaint against you – and report it to the insure – (whichever occurs first) is the policy that will apply to cover the claim, regardless of when the services were rendered which have given rise to the claim or potential claim (as long as the services were rendered after the retroactive date).
Due to the nature of claims’ made cover (which is the basis of your cover), you will need to have cover in place:
- At the time that you render the services which give rise to the claim; and
- At the time that you first become aware of the circumstances or incident which could give rise to a claim and notify it through to us in writing; and
- Between a. and b. above, i.e. cover should be continuous and there should be no ‘gaps’ in your cover.
If you do not renew a claims’-made policy or place the policy on run-off and a claim arises after the expiry date, you will have no further entitlement to cover under the policy. This applies even where you had cover at the time the work was undertaken.
The only benefit you would have from the previously lapsed policy is if you had already locked a policy into a claim by notifying your insurers in writing of a potential claim prior to your policy lapsing and they accepted and registered the notification against your policy.
We urge you to download and read our “Notes on the nature of claims’ made cover” for our comprehensive advice.