Physicians have several possible sources for obtaining professional liability insurance. The majority of physicians, whether they are independent contractors working alone or as a member of a contract group, have individual policies issued by physician-owned carriers or commercial insurers (owned by stockholders). In some states there are state-sponsored insurance programs for physicians who do not have access to other sources of professional liability insurance, commonly referred to as a Joint Underwriting Associations (JUAs). They offer the same provisions as a physician-owned or commercial carrier.

Risk Retention Groups (RRGs) came into existence as a result of the federal Risk Retention Act of 1986. Risk retention groups traditionally are created to bring similar risks together to spread over numerous individuals or groups of individual insureds. Risk Retention Groups form as insurance companies and must follow the insurance laws of at least one state. When first joining an RRG, a physician typically is required to pay a capital contribution in addition to the annual insurance premium.

Risk Purchasing Groups (RPGs) are another source of professional liability coverage for physicians. RPGs are not insurance companies but associations of insurance buyers with a common identity (e.g., a medical specialty society) who form an organization to purchase liability insurance on a group basis. Since an RPG purchases coverage from an insurance carrier, no capital contributions are required in order to join.

Trusts are another vehicle providing coverage to physicians in the US. In some states, trusts are not regulated by state insurance departments, nor are they protected by state guarantee funds in the event of insolvency. Trusts frequently require capital contributions in order to join, and trust members are retroactively assessed if assets prove insufficient to pay losses.

If considering coverage through a Trust, RRG, or RPG, a physician should carefully investigate all aspects of the policy, rules regarding accessibility, tail coverage requirements, and the financial solvency of the organization.

Employed physicians are generally covered under the professional liability program of the employer hospital/healthcare provider. Often, these programs are self-insured for a certain dollar amount and excess coverage is secured above the self-insured amount. Employed physicians are advised discuss the coverage specifics with the risk manager, administrator or insurance specialist of the organization for which they work. The procedure for the employed physician’s reporting of potential and claims and lawsuits to ensure their protection under their employer’s policy may vary from employer to employer. It is of vital importance to determine when events are to be reported to assure that coverage is triggered.