Occurrence-Type

This is the most traditional insurance policy that you may have purchased in other lines of insurance, similar to your auto insurance or homeowners’ insurance policy. Essentially, in an "occurrence-type" policy, you are covered against any person who sues you for medical malpractice, as long as the incident that gave rise to the lawsuit “occurred” while you were insured by the insurance carrier.

DISCLAIMER: This description is written in general terms for guidance and should not be relied upon in place of the language contained in your policy.

Claims-made

Generally, in a claims-made policy, you are only covered against a person who sues you for medical malpractice if two conditions are met:
(1) The incident that gave rise to the lawsuit occurred while you were insured with the insurance carrier; and
(2) at the time that the person brings forth the lawsuit, you are still insured with the carrier.

If you are non-renewed, cancel coverage or leave the insurance carrier that carried your claims-made policy, you can be protected for claims reported after you leave the insurer if you purchase an endorsement. This endorsement, which extends your reporting time, is called the Extended Reporting Period Endorsement (ERP) and is often referred to as the “tail." Generally with NJ PURE purchasing an ERP will be two times your expiring annual premium.

Free Tail Conditions: If you (1) die, become disabled, or are 55+ years old, (2) have been with NJ PURE for five full years, and (3) retire and never see another patient, you are generally entitled to a "tail" endorsement free of charge.

DISCLAIMER: This description is written in general terms for guidance and should not be relied upon in place of the language contained in your policy.

Switch to occurrence-type

Now, getting out of your claims-made policy can be affordable. NJ PURE offers an alternative to buying your costly tail from a previous insurance carrier. With our new Occurrence-Evergreen Policy form with Retroactive Pick-up you can finally switch from your current claims-made policy to an occurrence-type policy. For doctors who weren’t fully informed about the pitfalls when they decided to join a claims-made policy, this is the long-awaited opportunity to revert back to the traditional occurrence-type policy form. Contact NJ PURE directly to learn more details and see if you qualify for this coverage. If you qualify, you’ll receive a quote for this option within days.

Frequently Asked Questions

What is the difference between a "Claims-made" policy and an "Occurrence-Type" policy?

An "occurrence-type" policy is the most traditional insurance policy. Essentially, you are covered against any person who sues you for medical malpractice, as long as the incident that gave rise to the lawsuit "occurred" while you were insured by the insurance carrier.

In a “claims-made” policy, you are only covered against a person who sues you for medical malpractice if two conditions are met: (1) The incident that gave rise to the lawsuit occurred while you were insured with the insurance carrier; and (2) at the time that the person brings forth the lawsuit, you are still insured with the carrier. However, you are only protected for claims reported after you leave the insurer if you purchase a supplemental or additional endorsement called the Extended Reporting Period Endorsement (ERP), often referred to as the “tail,” which may cost up to two or three times your last year's premium.

Why is the Claims-made policy less expensive than the Occurrence-Type policy in the first five years?

The reason a claims-made policy is less costly in the initial five years is that as the policyholder, you do not represent a large exposure to the insurer in the beginning years of the claims-made policy. When you are in your first year of coverage, it is unlikely that the insurer would have to cover a claim filed against you for an act that occurred during your first year. In the second year, it is more likely that someone may file a claim against you for an incident that occurred in the first year of coverage. That is why in your second year, your insurance premium will be generally 50-65% of your mature rate; third year, it will likely increase to 70-85% of your mature rate; and in the fourth year, it amounts to 85-95% of your mature rate. In your fifth year, your exposure mimics that of an occurrence-type policy, as the insurer is now covering any claims filed against you for an incident that may have occurred over the initial five years.

What is the Surplus Contribution?

"Surplus" is the excess capital that insurance carriers must keep as a precaution in case the premiums are not enough to cover losses. In general, think of "surplus" as an insurance carrier's savings account. This amount is set aside only if our predictions are incorrect, and we need to pay claims or expenses that we didn't anticipate. Every insurance carrier is required to maintain a certain level of surplus in order to operate. Most "for-profit" insurance companies get the surplus in two ways: (1) through the accumulation of years of profits obtained from its policyholders; or (2) from selling stock on the stock market. However, because NJ PURE bases its rates upon what we predict will be needed to cover the costs of claims and expenses, there is no profit load included.

In addition, because we do not sell our stock on the stock market, we must generate that surplus from our subscribers themselves. As each member joins the Exchange, a surplus contribution is required. These surplus contributions are 10% of the cost of your premium for years one through four and a maximum of 10% each year after.

Is the Surplus Contribution refundable?

Yes, it is refundable. However, in order for you to receive this surplus back, three things must occur (as stated in paragraph 3 of our Power of Attorney): 1. You must have left the Exchange – that is you must no longer receive insurance through NJ PURE; 2. You must receive the approval from the Department of Banking and Insurance, the Insurance Commissioner and the Attorney-in-Fact; and 3. The claim year in which you left NJ PURE must be closed and the surplus adequacy must have been approved by the Department of Banking and Insurance and the Insurance Commissioner.

Does NJ PURE offer part-time rates for Obstetricians?

Not at this time.

Can I get a quote for insurance through my broker?

No, NJ PURE does not use brokers. We're happy to quote you directly.

What if part of my practice is out of state?

As long as 51% or more of your work is conducted in New Jersey (and you meet our underwriting guidelines) we can issue you a policy.