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TJ, Esq.
TJ, Esq., Attorney
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I am a pediatrician in private practice in Maryland and am

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I am a pediatrician in private practice in Maryland and am leaving my practice after 15 months. During the contract negotiations, I brought up the question of malpractice tail insurance with my employer. They assured me that no physician who has left the practice has had to pay for tail, the insurer covered them. Now, a few weeks prior to my departure, I contacted my insurer to make sure there was nothing I had to do regarding my termination and was notified that I needed to purchase tail insurance. The contract is silent on tail, it only states that the practice will pay premiums for malpractice liability at its sole discretion. In this case, who is responsible for paying for the tail?
Hello and thank you for the opportunity to assist you. My name is XXXXX XXXXX I will do my very best to answer your legal questions.

Q: In this case, who is responsible for paying for the tail?

A: Unfortunately, what you wrote here answers the question: "the practice will pay premiums for malpractice liability at its sole discretion"

If the payment of insurance premiums is at the discretion of the practice, then it can choose to pay or not pay. The fact that you were assured that no physician who left ever had to pay for tail insurance is irrelevant because the practice can use it's discretion, per the contract, to opt not to insure you. Accordingly, if the practice refuses, then it sounds like you will need to pay for tail insurance yourself.

I am truly sorry to give you this bad news, but please understand that it would be unfair to you (and unprofessional of me) to provide you with anything less than an honest response. However, if your concerns were not satisfactorily addressed, then please let me know, and I will be happy to clarify my answer. I do ask that you rate me based upon whether I answered your question, and not based upon whether the answer was good news or bad news. Your positive feedback is greatly appreciated. Thank you for using our service!

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Customer: replied 3 years ago.

Thank you for your answer. I appreciate your quick response.

You are quite welcome. I only wish that I could have given you better news. Thank you for using our service!
Customer: replied 3 years ago.

Sorry, I'm not sure if my last question went through. I just wanted to clarify. The contract actually states: "In addition to the compensation provided for in Section 7., above, the Employer agrees to Pay premiums for professional liability and malpractice insurance, in such amounts as the Employer deems necessary and appropriate in its sole discretion"


 


I'm assuming that even though the malpractice is provided at the sole discretion of the practice, that as long as the malpractice is necessary, they can't just stop paying. ie if they stopped paying for my regular malpractice, that would be a breach of contract. Since tail insurance is a necessary part of a claims based policy, wouldn't that make them not covering this "necessary" portion of my malpractice a breach?


 


thanks!

Hello again.

That language is slightly different than what you paraphrased before. That language indicates that malpractice insurance is required, and the the practice only has discretion as to the amount of the insurance. In that situation, the practice would likely need to pay for "reasonable" insurance. In other words, I doubt that the practice could get away with saying that they deem $0 as being "necessary and appropriate."

If tail insurance is a necessary part of a typical policy, then it stands to reason that they should pay. The other point is that the practice is absolutely stupid not to pay. After all, the practice has deeper pockets than you, right? If you were sued for malpractice, the practice would certainly be sued as well. You may want to make those two points to the practice to convince them to voluntarily cover the tail insurance: (1) that tail insurance is a part of malpractice insurance, and it is reasonable to expect it to be paid, and (2) if you are sued, the practice will be sued as well. Granted, they may have separate coverage, but maybe not ... I don't know how their policy works.
Customer: replied 3 years ago.

Thank you so much for allowing me to clarify my question. Your answer was very helpful!

You are quite welcome. Thank you for using our service!

If you would like to direct additional legal questions to me in the future, then please type "To TJ, Esq." in the subject line of your question.

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