Representatives in medical professional liability insurance might appreciate a review of the basic terminology inherent in the different stages of the malpractice claims process. Clarity of policy language, an understanding of protocols and procedures in the reporting and filing of claims, and familiarity with the elements required to establish a lawsuit, help guide our agents in serving our insureds.
Incident Date
Also known as the occurrence or accident date, this is the day of the alleged injury, death, or other adverse event suffered by a claimant. The incident is what initiates that individual’s complaint or claim. For occurrence policies the incident date determines the policy year that coverage will be afforded to the provider.1
First Notice
A first notice, or first notice of loss (FNOL) is usually the first step in the claims process and refers to the first report made to the insurance provider after a claimant’s alleged loss. Here it is the healthcare provider’s initial notice informing their MPL insurance carrier of a patient’s stated or implied dissatisfaction with care, or of an adverse event that could potentially lead to a claim. This notice is not a lawsuit or demand for monetary recovery but, rather, an alert of a potential claim. The healthcare provider’s policy requires the insured to immediately inform the carrier of anything resembling a legal notice or claim, such as a citation or petition. Prompt notification of these alerts is essential for the insured to avoid any issues in their coverage and to help ensure protection against possible harmful conduct.3 With a claims-made policy, the date a first notice is reported will be considered the date the claim is made, should a claim later be pursued.
As noted, healthcare providers are urged to immediately report any potential claim to their insurance carrier. This means indications or warning signs of a claim, including but not limited to the following:
Unless otherwise defined in the insurance policy, a claim is a written or oral demand for compensation (money or services) made by a patient or patient representative for a perceived damage or loss.1 This alleged loss or damage could mean an injury, death, or other negative outcome related to treatment.2 A lawsuit is considered a claim1, though this term refers commonly to the formal litigation process in the court system. The claimant may present a demand to the healthcare provider documenting allegations of negligence on their part, i.e., “failure to use ordinary care.” They may file a complaint for damages in the court system, naming the provider as a defendant.3 A healthcare provider may be a physician, dentist, nurse practitioner, nurse, or other healthcare professional. A provider can also be the facility or organization that delivers patient care or sells and maintains medical equipment for that purpose.2 A healthcare provider initiates reporting of a potential claim, and the insurance carrier gathers important and relevant data to determine the type of claim, its impact, and the available coverage. This information includes the patient’s name, date of birth, medical records, date of the alleged event, and the allegations in the complaint. A claims representative or specialist, assigned by the insurer, guides the healthcare provider through the next steps in the claims process. If a lawsuit is filed, the carrier assigns legal counsel or, if requested, may consider using the provider’s own attorney, and together they begin formulating a defense.3
When a claim must be reported depends on the type of the medical provider’s liability policy. In a claims-made policy (the most common type of MPL insurance), a claim must be made against the provider and reported during the policy period, within the active policy dates, for it to be covered. For an occurrence policy the incident must occur during the policy period, but the claim may be reported on any date, even when the insured’s policy is no longer active. A policy will indicate the coverage available for the provider, as well as any exclusions. Coverage generally includes the costs to defend a claim, including court and attorney fees, incurred medical expenses, and settlements. Whether coverage may be provided for punitive damages, and whether damage caps apply, is determined by applicable state law.2
In the medical liability context, a lawsuit/suit is a complaint or action initiated by a patient or patient representative and filed in the court system, demanding recovery of damages for a perceived loss. The lawsuit alleges that one or more defendants1 (healthcare providers or organizations) committed an act of negligence or omission related to the patient’s care, resulting in an injury or adverse event.3 The process for legal proceedings and jury selection for a lawsuit are determined by state.
To file a medical negligence lawsuit, four elements must be asserted in the complaint regarding the healthcare provider:
When a lawsuit is reported and coverage is confirmed, the insurance carrier assigns the healthcare provider a lawyer, who will answer the lawsuit. This answer is time sensitive, so timely reporting by the healthcare provider to the insurance company at the first indication of a lawsuit is imperative.3