How to Get Professional Liability Coverage After an Employer’s Bankruptcy

• Occurrence Coverage (OC): Covers claims from incidents that happen during the policy period. It does not matter when the claim is filed. 
• Claims-Made Coverage (CM): Only covers claims that are both made and filed during the policy period. Claims for care during the policy period won't be covered if filed after the policy expires. Physicians with CM coverage must get tail coverage or prior acts (retroactive) coverage. This keeps them protected after cancellation, termination, or non-renewal.

Physicians who are unsure of the type of coverage reported to Mcare can request a coverage history. Complete the Mcare Request for Insurance Verification/Coverage History form.

Physicians with CM coverage will be left without primary coverage if their employer is contractually obligated to provide tail coverage but fails to do so because of bankruptcy. In these cases, Mcare will be unable to provide excess coverage.

Physicians have three options if an employer fails to meet its contractual obligation to provide tail coverage:

1. Standalone Unlimited Tail Coverage – Physicians can purchase a policy for unlimited tail coverage. This protects them from claims related to past services.
2. Claims-Made Coverage with a Retroactive Date – Physicians can obtain claims-made coverage with a retroactive date. This option extends coverage to prior acts under the previous claims-made policy.
3. Prior Acts Coverage with a New Employer – Physicians can negotiate prior acts coverage with their new employer.

If an employer declares bankruptcy, physicians should notify the bankruptcy court of the employer’s contractual obligation to provide tail coverage.  

The following admitted insurers offer the coverage options described above:

For help or questions, physicians can reach Mcare by email at RA-IN-MCARE-NON-COMPLIANCE@pa.gov or call 717-783-3770 (option 1 for Mcare and then option 3 for Compliance Unit).