Learn the language of medical malpractice insurance.



Termination of the physician-patient relationship without reasonable notice or reasonable opportunity for the patient to acquire medical care.

Additional Insured

A person, company or entity protected by an insurance policy in addition to the insured.

Ambulatory Care

Medical services provided on an outpatient (non-hospitalized) basis. Services may include diagnosis, treatment, surgery, and rehabilitation.

Annual Aggregate Limit

The total amount of liability for all claims in one policy year shall not exceed the limit of liability as stated on your certificate of insurance.


A legal proceeding used for the resolution of disputes outside the courts where the parties involved in a dispute, utilize the services of one or more professional arbitrators, who hear evidence and render a final decision that all parties agree to abide by.


Contract under which an assessment insurance company can charge policyholders’ additional sums if the company's loss experience is worse than had been loaded for in the premium.


A person who is authorized to perform business-related transactions on behalf of someone else (the principal). In order to become someone's attorney-in-fact, a person must have the principal sign a power- of-attorney document. This document designates the person as an agent, allowing him or her to perform actions on the principal's behalf.

A.M. Best Rating

An independent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparing insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors.

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Bodily Injury

Physical injury, sickness or disease. Bodily Injury also includes loss of care or services that result from the above.

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The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company.


In medical malpractice cases, the plaintiff must prove that the injuries sustained as a result of the healthcare provided were caused by a negligent act.


A written notice or demand for damages by the insured or the insured's beneficiary.

Claims-Made Insurance

A form of insurance that pays claims presented to the insurer during the term of the policy or within a specific term after its expiration. It limits liability insurer’s exposure to unknown future liabilities.

Combined Loss Ratio

A measure of the relationship between dollars spent for claims and expenses and premium dollars taken in. The sum of the ratio of losses incurred to premium earned and the ratio of commissions and expenses incurred to premium written. A ratio above 100 means that for every premium dollar taken in, more than a dollar went to losses, expenses, and commission.


A voluntary act by which a person allows another to do something. Consent may be verbal.


A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy.

Contributory Negligence

A common law defense to a claim based on negligence, an action in tort. It applies to cases where plaintiffs have, through their own negligence, contributed to cause the damages they incurred as a result of defendants' negligence. For example, a pedestrian crosses a road carelessly and is hit by a driver who is also driving carelessly.


The scope of protection provided under a contract of insurance; any several risks covered by a policy.

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Money paid or awarded to a claimant following a successful claim in a civil action.


That page of the insurance policy which lists the insurance company, its address, name of the policyholder, starting and ending dates of coverage, and the actual coverage’s given in the contract, including the locations and amounts.


A legal proceeding by which one party asks questions of the other party or of a witness for the other party. Depositions are conducted under oath outside of the courtroom for which a word-for-word account or transcript is made to memorialize the proceedings.


Information and documents to assist the parties in understanding the issues that each side will need to know before going to trial and to help all the involved parties decide whether or a resolution of the case short of trial may be indicated.


Decision by a court to terminate a lawsuit or a portion thereof or a filing of a document by a plaintiff that terminates the lawsuit.


A policyholder’s share in the insurer’s divisible surplus fund apportioned for distribution, which may take the form of a refund of part of the premium on a participating policy.


An obligation recognized by the law. A physician’s Duty to a patient is to exercise that degree of skill, care, and learning expected of a reasonably prudent physician in the profession or class to which he or she belongs acting under the same or similar circumstances.

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Elements Of A Malpractice Case

To prevail in a medical malpractice case, the plaintiff must establish a breach in the standard of care, and proof that the breach caused injury and damages.


A form attached to the policy (not a part of the original contract) which alters the coverage to fit special circumstances. The endorsements can either add or remove specific types of coverage.


Specific conditions or circumstances listed in the policy for which the policy will not provide coverage.

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General Damages

Compensates the claimant for the non-economic aspects of the specific harm suffered. This is usually termed 'pain, suffering and loss of amenity'. Examples of this include physical or emotional pain and suffering, loss of companionship, loss of consortium, disfigurement, loss of reputation, loss or impairment of mental or physical capacity, loss of enjoyment of life, etc. This is not easily quantifiable, and depends on the individual circumstances of the claimant.

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Hard Market

That part of the insurance sales cycle in which competitive pricing is at a minimum as companies charge the premium necessary to meet their underwriting loses in order to avoid insolvency and boost capacity; usually associated with a sharp decline in capacity.

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An event that the policyholder reports to the insurer that may lead to a Claim.

Incident Date

The date on which treatment, care, or a failure to act took place. It can also be called the date of occurrence. For Medical Malpractice, it can be called the “ incident” date.


The inability or lack of legal qualification or fitness to discharge the required duty.


Compensation to the victim of a loss, in whole or in part, repair, or replacement.


Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.

Informed Consent

A patient’s agreement to allow medical treatment based on a full disclosure of the facts necessary to make an intelligent decision. It allows a patient to balance a treatment’s potential benefits and risks against the potential benefits and risks of alternative treatment, including the alternative of no treatment. Generally, the patient’s Informed Consent: is required for any medical treatment involving significant possible risks, complications, or adverse outcomes.


A person or organization covered by an insurance policy, including the “named insured” and any other parties for whom protection is provided under the policy terms.

In Propria Persona or In Pro Per

A plaintiff representing him or herself and acting as his or her own attorney.

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Joint And Several Liability

Each defendant or tort feasor whose negligence is a proximate cause of the injury remains individually liable for all compensable damages.

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The obligation an individual or entity incurs or might incur as a result of a negligent action, a failure to act, or an omission.

Liability Limits

The stipulated sum or sums beyond which an insurance company is not liable to protect the insured.

Locum Tenens

A healthcare provider who is serving as a temporary relief or substitute.

Loss Prevention

The process of analyzing exposure to risk and determining which options are best at reducing or eliminating the risk

Loss Ratio

The ratio of claims to premiums. It may be calculated in several different ways, using paid premiums and earned premiums, and using paid claims with or without changes in claim reserves.

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Improper care or treatment by a physician, hospital, or other provider of health care.

Manual Rate

The premium rate developed for a group of insurance coverage from the company’s standard rate tables normally referred to as its rate manual or underwriting manual.

Medical Incident

Any act, error or omission in your providing or failure to provide professional services, including your responsibility for anyone acting under your direction or control.

MICRA (California Only)

The Medical Injury Compensation and Reform Act, passed in 1975,  limits awards for general damages, sets contingency fees, allows for periodic payment of damages, sets the statute of limitations and requires that plaintiffs give health care providers 90-day notice of their intent to file suit.

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Failure to use the care that a reasonable and prudent person would have used under the same or similar circumstances.

Ninety (90) Day Notice of Intent to Sue (California only)

Requires plaintiffs or their attorneys to provide 90-day notice of intention to file suit against any health care provider. This is often used to open a dialogue with insurance carriers. In many cases, the plaintiff or attorney discover that their case has no merit during 90-day period or case may be settled during that time.


Insurance contract under which a policyholder cannot be assessed for adverse loss and expense experience of the insurance company.

Nose Coverage (See Prior Acts)

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An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, that result in bodily injury or property damage during the period of an insurance policy.

Occurrence Policy

A liability insurance policy that covers claims arising out of occurrences that take place during the policy period, regardless of when the claim is filed.

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Physician Peer Review

A valuable form of peer-to-peer evaluation that allows all parties to hold frank and truthful discussions about the appropriate standard of care—or failure to achieve it—without concern for later consequences, as the committee’s proceedings are not open to discovery.


The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance also called the policy contract or the contract.

Policy Period

The period during which an insurance policy provides coverage. The period of time is indicated on the declarations page from the effective date to the expiration date.

Premises Liability

Legal liability coverage for professional office locations that is owned or leased by the policyholder for injuries to patients or members of the public sustained at the policyholder’s office premises


The sum paid by a policyholder to keep an insurance policy in force.

Professional Liability Insurance

Provides protection for the insured against loss arising out of legal liability to third parties (i.e. third party liability).

Professional Premises

The particular location of the property or a portion of it as designated in the policy declaration.

Prior Acts or Retroactive “Nose” Coverage

Coverage under a claims-made policy for all acts that occurred before the policy was issued. Unlike most claims-made policies, which have a retroactive date specifying the first date from which claims are recognized.

Professional Services

Those services for which you are licensed, trained, and qualified to perform in your capacity as a healthcare provider in the professions shown on the declarations page. It would also, your services while acting as a member of a formal accreditation, standards of review, or similar professional board or committee, including the directives of such board or committee.

Property Damage

Means injury to or destruction of tangible personal or real property.

Property Damage (liability)

Protection against liability for damage to the property of another not in the care, custody and control of the insured, as distinguished from liability for bodily injury.

Proximate Cause

The dominating cause of loss or damage; an unbroken chain of events between the occurrence and damage.

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The purchase of insurance by an insurance company from another insurance  company (reinsurer) to provide it protection against large losses on risks it has already insured.


An amount representing liability kept by the insurer to pay for future losses under policies outstanding.

Reservation of Rights

An arrangement whereby an insurer defends a case without commitment to provide coverage in the event that the facts disclosed during the trial reveal that the occurrence is not covered.

Res ipsa loquitur

Legal term for “The thing speaks for itself.” A doctrine of law that arises when the defendant had exclusive control of the instrumentality causing the harm and the bodily injuries would not have ordinarily occurred in the absence of Negligence. In such cases the defendant has the burden of proving there was no Negligence. 

Respondeat Superior

Legal term for  “Let the master answer.” The legal principle that makes an employer liable for civil wrongs committed by employees acting within the course and scope of their employment. See Vicarious Liability.

Retroactive Date

The date on a "claims made" liability policy, which triggers the beginning of insurance coverage. If one is shown on a policy, any claim made during the policy period will not be covered if the loss occurred before the retroactive date.

Retrospective Rating

Rating procedure which allows adjustment of a policyholder’s final rate on the basis of the policyholder’s own loss experience.

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Soft Market

That part of the insurance cycle in which competition is at a maximum as insurance companies use their excess capacity to sell more policies at lower prices.

Solo Professional Corporation

A professional corporation with only a single shareholder who is engaged in the delivery of health care services.

Special Damages

Compensate the claimant for the quantifiable economic losses suffered by the plaintiff. For instance, lost earnings, both historically and in the future, cost of household support, past and future medical expenses.

Standard Of Care

In tort law, the standard of care is the degree of prudence and caution required of an individual who is under a duty of care. A breach of the standard is necessary for a successful action in negligence. The requirements of the standard are closely dependent on circumstances. Whether the standard of care has been breached is determined by the trier of fact and is usually phrased in terms of the reasonable person. As to whether the individual proceeded with such reasonable caution as a prudent man would have exercised under such circumstances.

Standard Markets

Insurance companies for which the vast majority of people qualify.

Statute of limitations

A statute in a common law legal system that sets forth the maximum period of time, after certain events, that legal proceedings based on those events may be initiated

Structured settlement

A financial or insurance arrangement, including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation

Substandard Insurance

Insurance  issued with an extra premium or special restrictions to those persons who do not qualify for insurance at standard rates.


Legal document requesting records or testimony requiring a response; you should always contact the Claims Department for assistance in responding to service of legal documents, no matter how innocent the situation appears

Summary Judgment

Legal term which means that a court has made a determination (a judgment) without a full trial. Such a judgment may be issued as to the merits of an entire case, or of specific issues in that case, such as the standard of care or legal causation

Summons and Complaint

SUMMONS:  Civil summons is a written notification to a party named in a lawsuit directing the party to appear and defend or answer before the issuing court prior to a specified time. Failure to appear or answer may allow judgment to be entered against the non-responsive party in favor of the plaintiff.

COMPLAINT: A complaint is a statement of the jurisdiction of the court, the allegations constituting the cause of action, and a demand for judgment. This is the first or initial pleading on the part of the plaintiff.

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Tail Coverage or Extended Reporting Endorsement

Coverage that protects the physician against all claims that arise from professional services performed while the claims-made policy was in effect, but which were reported after the termination of the policy.  Some insurers offer this feature free of charge for retiring doctors who meet certain requirements.

Third Party

The claimant under a liability policy. So called because the person making the claim is not on of the two parties, insured and insurer, to the insurance contract.


A civil wrong, other than a breach of contract, for which a court of law will afford legal relief, i.e. harming another by an act of negligence.


A trust is a legal entity created for the purpose of holding, managing, and distributing property for the benefit of one or more persons. A trust can hold cash, personal property, or real property, or it can be the beneficiary of life insurance proceeds. In the most basic sense, a trust is just another form of a contract.

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Vicarious Liability

A legal concept that refers to one party being held liable for the acts or omissions of another party, despite the fact that they had no active involvement in the incident. People or entities typically charged with vicarious liability include supervisors or companies since they bear responsibility for the actions of their employees.

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