HCM 3080 Module 10 Liability Insurance Exercise Example

Course	HCM-3080 Healthcare Legal and Ethical Considerations
Module	Module 10
Paper type	Exercise: insurance
Length	About 504 words, 4 pages
Format	APA 7 student paper
School	Thomas Edison State University
Program	B.S. in Healthcare Management
Updated	October 2026

Free sample paper for HCM 3080 Module 10

Occurrence, Claims-Made and the Tail: Choosing Malpractice Coverage for Riverbend's Employed Physicians

Student Name

B.S. in Healthcare Management, Thomas Edison State University

HCM-3080: Healthcare Legal and Ethical Considerations

Mentor Name

Month Day, Year

What this page is doingThe title names the two policy forms and the term students most often get wrong, the tail, which tells the mentor what the exercise will explain. Setting it in a specific hospital's decision keeps the definitions practical.

Occurrence, Claims-Made and the Tail: Choosing Malpractice Coverage for Riverbend's Employed Physicians

Riverbend Community Hospital, a composite hospital in southern New Jersey, employs 42 physicians and has bought occurrence-based malpractice insurance for them for a decade. Its broker has proposed switching to a claims-made policy with a lower first-year premium. The finance chief wants a plain account of the difference, the hidden costs and the legal minimums before the board decides. This exercise answers those questions.

Occurrence and Claims-Made Policies

An occurrence policy covers incidents that happen during the policy period, even if the lawsuit arrives years later. If a physician treats a patient in 2026 and the patient sues in 2029, the 2026 policy responds, even if the physician has since left. A claims-made policy covers claims that are both made and reported while the policy is in force, for incidents after the policy's retroactive date. If the policy ends, claims filed later are not covered unless additional coverage is bought.

Claims-made premiums start low and rise over the first several years, because early in the policy only a few incidents have had time to turn into claims; occurrence premiums are higher from the start but stable. Delays between incident and claim are common, which is why the difference matters.

Tail and Prior-Acts Coverage

The hidden cost of claims-made coverage is the tail, formally an extended reporting endorsement, which covers claims made after the policy ends for incidents during the policy period. When a physician leaves, retires or the hospital changes carriers, someone must buy the tail or the physician is exposed. Tail premiums are often a large multiple of the annual premium. The reverse option, prior-acts or nose coverage, is bought from a new claims-made carrier to cover incidents before the new policy began. Riverbend's employment contracts must state clearly who pays for the tail when a physician departs.

What this page is doingThe exercise defines each term and then states the practical decision it creates for the employer. Insurance exercises in this module usually turn on whether the student understands timing.

Legal Minimums and Exposure

New Jersey requires physicians practicing in the state to carry medical malpractice liability insurance or a letter of credit of at least $1 million per occurrence and $3 million per policy year (N.J. Stat. Ann. § 45:9-19.17). The hospital's group policy must meet those minimums for each physician. Exposure varies sharply by specialty: Jena et al. (2011) reported a yearly claim rate near 7% across all physicians, ranging from roughly 19% in neurosurgery to under 3% in psychiatry, and that by age 65 most physicians in all specialties had faced at least one claim. Liability costs extend beyond premiums; Mello et al. (2010) estimated total medical liability system costs, including defensive medicine, at $55.6 billion in 2008, or 2.4% of national health spending.

Recommendation

Claims-made coverage can be sensible if the hospital budgets for rising premiums and for tail costs as physicians leave, ideally by setting aside reserves each year. Comparing the two options over at least five years, including expected turnover and tail purchases, will show whether the lower first-year premium is a real saving or a deferred cost. The board should not decide on first-year price alone.

References

Jena, A. B., Seabury, S., Lakdawalla, D., & Chandra, A. (2011). Malpractice risk according to physician specialty. New England Journal of Medicine, 365(7), 629-636. https://doi.org/10.1056/NEJMsa1012370

Mello, M. M., Chandra, A., Gawande, A. A., & Studdert, D. M. (2010). National costs of the medical liability system. Health Affairs, 29(9), 1569-1577. https://doi.org/10.1377/hlthaff.2009.0807

N.J. Stat. Ann. § 45:9-19.17 (2024). Medical malpractice liability insurance required. https://law.justia.com/codes/new-jersey/title-45/section-45-9-19-17/

Reading the HCM 3080 Module 10 assignment instructions

Insurance is the tenth module in the syllabus. If your section assigns an exercise here, expect a brief applied answer, around one to two pages, of the kind the syllabus describes as practice in using a concept on a real problem; the course includes five such exercises. Read the classroom version of the questions, which may be updated between terms. Insurance exercises can cover professional liability policies, risk financing, patient coverage rules or billing protections. Define each insurance term with a dated example, cite any statute that sets a minimum or a duty, and check your state's own insurance rules. Hand it in by the date your section posts.

How the HCM 3080 Module 10 example is put together

The exercise answers a chief financial officer's question about switching the employed physicians' malpractice policy. It defines occurrence and claims-made coverage by when the incident happens and when the claim arrives, with a dated example, and explains why claims-made premiums climb for several years. Tail and prior-acts coverage are defined next, along with the contract question of who pays when a physician leaves. The legal section cites New Jersey's required limits and uses specialty data on claim frequency and an estimate of total liability system costs. A short recommendation tells the board to compare five years of costs, including tails, before deciding on first-year price.

Reading the HCM 3080 Module 10 grading rubric

Insurance exercises are judged on correct definitions, especially the timing difference between occurrence and claims-made coverage, accurate explanation of tail and prior-acts coverage, application to the scenario and clear writing for a reader without insurance training. Citing the statute behind any required limit shows precision, and using data on claim frequency or system costs adds weight. A recommendation that compares costs over several years rather than one demonstrates financial judgment. Because the answer should be short, an organized structure that follows the questions asked is part of the score, along with accurate citations. Mentors also value a recommendation that a board could act on at its next meeting, with the comparison period stated.

Common HCM 3080 Module 10 mistakes, and how to avoid them

Insurance exercises most often reverse the two policy forms. Anchor occurrence and claims-made coverage to an example with dates and the confusion disappears. The tail is the next most common gap, even though it is frequently the largest hidden cost of claims-made coverage. Check the statute behind any minimum limit instead of repeating a number from memory. Write for a board member who has never read a policy. Follow the questions in order and keep the answer short. If your prompt concerns patient health coverage rather than liability insurance, adjust the terms accordingly. The desk can complete your insurance exercise from the scenario and questions you received. Test your definitions on a friend outside health care; if they follow, the mentor will too.

Write yours, or have the desk draft it

This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.

More HCM 3080 and B.S. in Healthcare Management sample papers

HCM 3080 Module 10 questions, answered

Where can I find a free HCM 3080 Module 10 sample paper?

The complete Module 10 exercise is above, comparing occurrence and claims-made malpractice coverage for a hospital's physicians, with notes on the sheets.

What is the difference between occurrence and claims-made insurance?

An occurrence policy pays for events that happened while it was in force, even if the suit comes years later. A claims-made policy pays only if the claim is both made and reported during the policy period.

What is tail coverage?

An extended reporting endorsement that covers claims made after a claims-made policy ends for incidents that occurred while it was in force. It is often expensive and must be assigned by contract.

How much malpractice insurance must New Jersey physicians carry?

State law requires coverage or a letter of credit of at least $1 million per occurrence and $3 million per policy year.

How common are malpractice claims?

Roughly 7% of physicians face one in any year, according to national insurer data, though the rate swings widely between specialties and most claims end without payment.