General information

1. The MagMutual headquarters is located at:
   3535 Piedmont Rd. NE, Suite 14-1000
   Atlanta, GA 30305

A 

Absolute Liability

No proof of fault or negligence necessary to hold a person or company responsible.

Adjudication

The legal process of resolving a dispute.

Admitted Assets

The assets of an insurance company that the state allows to be included on its financial statements.

Aggregate Limit

The maximum amount an insurer will pay for covered losses during the defined policy period.

Arbitration

Resolution of a dispute by an unbiased third party chosen by the involved parties.

C

Captive

An insurance company that is wholly owned and controlled by its insureds.  

Claim

A demand made for money or bill reduction alleging injury, disability, sickness, disease or death of a patient arising from a medical provider’s rendering or failing to render professional services.

Claims-Made Insurance

Claims-made is a form of insurance in which coverage is limited to liability for claims that arise from incidents or events that occur and are reported to the insurance company during the policy period.

Consent to Settle

A policy provision that requires the insured’s consent before the insurer is allowed to settle a claim.

D

Date of Incident

The date on which the alleged liability incident took place. It can also be called the date of occurrence.

Date of Reporting

The date on which an incident was reported to the insurance company.

Declaration/Declarations Page

Part of an insurance policy that declares the name and address of the insured, the policy period, the amount of insurance coverage, premiums due for the policy period and any coverage restrictions.

Deductible

The amount that must be paid out of pocket by the policyholder before the insurance provider pays.

Dividend

A partial return of premium to policyholders, usually dependent on the amount of claims paid or to be paid, declared by the insurance company’s board of directors.

Domiciled

Refers to the state in which an insurance company receives a license to operate. The company is then regulated by that state’s department of insurance.

E

Earned Premium

The portion of premium that applies to an actual coverage period. Policyholders usually pay a calendar quarter or more in advance of the actual coverage period; the advance payment is initially unearned and becomes earned incrementally during the ensuing coverage period.

Economic Damages

Out-of-pocket monetary expenses, such as medical bills incurred, lost wages, etc.

Endorsement

An amendment, sometimes referred to as a rider, added in writing to an insurance policy.

Excess Insurance

A separate insurance policy with limits above the primary (or “first dollar”) policy.

Experience Rating

A system of pricing insurance in which the future premium reflects the actual past loss experience of the insured.

Extended Reporting Endorsement

Also known as tail coverage, it provides coverage for claims made for incidents that occurred during the policy period but were not reported until after the policy period expired.

I

Incident

An event that the patient claims resulted in culpable injury.

Incurred But Not Reported Losses (IBNR)

An estimate of losses for incidents that have occurred during a policy period (usually one year), but have not yet been reported to the company. Mainly applicable to occurrence policies, these apply to claims-made policies only when extended reporting endorsements (tail coverage) are in effect.

Incurred Losses

These losses include both paid and unpaid (reserved) losses.

Indemnity

An insurance company’s payment to a plaintiff in settlement or adjudication of a claim.

Indemnity Reserves

Claims reserves that are set aside to pay the portion of claims costs paid directly to claimants.

J

Joint Underwriting Associations (JUAs)

State-sponsored insurance vehicles for physicians who do not have access to other sources of professional liability insurance. Insureds of some JUAs bear infinite assessability for losses incurred by the organization during prior years of insurance activity. In some states in which JUAs operate, all casualty insurers in the state are assessable. In others, only the insured doctors are assessable. In those instances in which only the insureds of the JUA are assessable, ultimate financial obligations are unpredictable and can be significant.

L

Liability

Legal responsibility for one’s actions or omissions.

Limit

The maximum amount paid under the terms of a policy. A professional liability insurance policy usually has two limits, a per-claim limit and an aggregate limit.

Loss Ratio

Losses incurred divided by net earned premium.

Loss Reserves

The amount set aside to pay for reported and unreported claims.

M

Malpractice

Medical malpractice is a legal cause of action that occurs when a medical or healthcare provider deviates from professional standards, causing injury, harm or death to the patient.

N

Net Earned Premium

Net written premium (plus assumed premium for reinsuring risk) less unearned premium.

Net Written Premium

Direct written premium less payments to reinsurers.

Nonassessable

A condition under which an insurance company is sufficiently financially sound, freeing policyholders of an obligation to pay additional money for past losses for which reserves are inadequate.

Noneconomic Damages

Pain, suffering, inconvenience, loss of consortium, physical impairment, disfigurement and other nonfinancial damages.

O

Occurrence-Based Insurance

A type of policy in which the insured is covered for any incident that occurs (or occurred) while the policy is (or was) in force, regardless of when the incident is reported or when it becomes a claim.

P

Paid Losses

The amount paid in losses during a specified time period.

Policy

The contract between an insurance company and its insured. The policy defines what the company agrees to cover for what period of time, as well as the obligations and responsibilities of the insured.

Policy Term

The length of time for which a policy is written.

Premium

The amount of money a policyholder pays for insurance protection.

Premium Credits

A credit included in the premium calculation that recognizes a reduction in hazard, which makes the account a better risk.

R

Rate Maturation

In the early period of coverage (typically the first four to seven years), claims-made insurance rates rise annually until they are considered mature. Increasing the premium is necessary because the longer the physician is insured, the greater the potential for a claim. That is because of the delay between incidents occurring and patients filing claims from those past incidents.

Reinsurance

An agreement between insurance companies in which one accepts all or part of a risk or loss of the other. Most primary companies insure only part of the risk on any given policy with the rest covered by reinsurance entities.

Retroactive (Prior Acts) Coverage

Under a claims-made policy, retroactive coverage provides insurance for claims arising from incidents that occurred while a previous claims-made policy was in effect, but weren’t reported until that policy was terminated.

Retrospective Rating

A formula of premium calculation that reviews the previous loss experience and, after the policy year ends, adjusts the premium based on the loss experience. Some plans provide a guaranteed maximum cost; some guarantee that the premium will not exceed the standard premiums otherwise applicable.

Reunderwriting

Reevaluating policyholders and imposing surcharges, deductibles or nonrenewal in situations where the policyholder’s claims history or other experience presents creates an undue liability risk.

Risk Classifications

A risk classification is based on the number and amount of losses that can be expected from a physician’s specialty and procedures.

Risk Management

An approach to understanding the causes of and reducing or eliminating the possibility of unexpected outcomes. Risk management helps improve patient safety, reduce injury resulting from negligence and lower resulting financial losses.

Risk Purchasing Group (RPG)

An association of insurance buyers with a common identity who form an organization to purchase liability insurance on a group basis. Since an RPG purchases coverage from an insurance carrier, no capital contributions are required in order to join.

Risk Retention Group (RRG)

A group of insurance buyers who form an insurance company, which is required to follow the insurance laws of at least one state and is governed by the laws of the state in which it is domiciled. When first joining an RRG, a physician is typically required to pay a capital contribution in addition to the annual insurance premium.

S

Standard Risk

A person who is eligible for insurance without restrictions or surcharges based on underwriting standards.

Substandard Risk

A person who must pay higher premiums and is subject to special coverage restrictions based on underwriting standards.

Surplus

The amount by which a company’s assets exceed its liabilities. An insurance company’s surplus allows it to take on risk and serves as a cushion in the event that the losses from that risk exceed the policyholder premiums intended to cover the risk.

T

Tail Coverage (Extended Reporting Endorsement)

Coverage that provides protection against 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.

U

Umbrella Coverage

Umbrella coverage is a type of excess insurance that provides coverage over and above the policyholder’s other policies.

Unallocated Loss Adjustment Expenses (ULAE)

Claims expenses of a general nature that are not directly attributable to specific claims. They include the salaries of claims personnel and the other costs of maintaining a claims department.

Unearned Premium

That portion of a premium that is paid in advance of a coverage period. Policyholders usually pay a calendar quarter or more in advance of an actual coverage period; the advance payment is initially unearned and starts to become earned on the first day of the coverage period and incrementally thereafter.

V

Vicarious Liability

Liability for the acts of someone else.

Our standard office hours are Monday-Friday, 8:30 am-5 pm (ET).
For general assistance, please call your agent or 800-282-4882.
To report a claim, call 800-586-6891 to speak directly to a member of our claims team. You may also email a completed Incident Report Form to [email protected] or fax it to 404-842-9556. 
For PolicyOwners having an urgent or emergency situation who need immediate support, please call our 24/7 risk hotline to speak to one of our experienced physician consultants.