Insurance policies with multiple insureds sometimes offer the policyholder the option of shared limits or separate limits. The difference between these options dictates how the coverage limits of the policy are available to its individual insureds.
Separate Limits: The entity, each insured, or both have coverage up to the full limits of the policy.
For example, on a surgical center’s policy with a $1,000,000 per claim limit, if the surgical center, one of its surgeons, and one of its anesthesiologists are named in a claim, each would have their own $1,000,000 coverage limit for the claim.
Shared Limits: A single limit covers the organization and the individual insureds on the policy.
In the example above on a shared limit policy, the surgical center, surgeon, and anesthesiologist are covered by and share in the same $1,000,000 limit.
For physician insureds—whether in group or solo practice—it’s important to note that hospitals may require separate limits and specific liability levels for physicians maintaining admitting privileges. Likewise, states may have their own requirements on limits or prohibitions against shared or separate limits in certain scenarios. Pennsylvania, for example, does not allow shared corporate limits. In states that have no prohibition against it, it is quite common for corporations to not obtain separate limits, but instead to share in the limits of their insured physicians.
The Difference
The Difference is an ongoing educational series from ProAssurance, designed to compare and contrast common items in medical professional liability insurance. The side-by-side comparisons make it easy to compare so you can easily pick up the highlights of each.