Many medical practices treat claims-made and occurrence malpractice policies as if they work the same way. They don’t. That misunderstanding often becomes expensive, especially because claims-made premiums typically increase from the very first year of the policy.
A claims-made policy covers incidents that are both reported and occurred while the policy is active. What many practices miss is that the cost rarely stays flat during the early years. Premiums typically rise for the first five years as the carrier adds more exposure history to the policy. By year five, the premium usually reaches its mature rate. Practices that do not plan for these increases often face unexpected budget pressure.
An occurrence policy behaves differently. It covers incidents that happen during the policy year, even if they are reported much later. The initial premium is usually higher, but there are no step-up increases and no need for tail coverage when switching carriers or retiring a policy.
Most practices do not realize the financial impact of these differences until they see a sharp renewal increase or prepare for a physician to join or leave the group. We regularly walk practices through these transitions, and the most common reaction is surprise at how quickly step-ups accumulate.
Understanding these mechanics early helps leaders budget more accurately and select the structure that supports long-term stability. Unity Insurance was built in partnership with MedChi, which keeps our focus on practical, physician-centered solutions rather than one-size-fits-all policies.
If you want to understand where your current policy sits in the step-up cycle, or whether a different coverage structure would serve you better, we can help you evaluate your options.