OB/GYN Malpractice and Tail Coverage: The Premium and the Long Shadow

Geography prices this specialty more than any negotiation can, and the AMA table is the document that proves it. These are reported annual premiums for $1M/$3M policies from selected insurers, obstetrics and gynecology, from the AMA Policy Research Perspectives exhibit built on Medical Liability Monitor data through 2025. Liability premiums rose for the seventh consecutive year in that report.

Read the table as a compensation document. The spread between the top and the bottom is $194,184 a year, because $243,988 minus $49,804 is $194,184. Internal medicine in the same Florida market, Miami Dade, is $59,736 in the same exhibit, so the obstetrician premium is about four times the internist premium in the same city, because $243,988 divided by $59,736 is about 4.1. Set against average compensation of $390,000 in the Medscape Physician Compensation Report 2026, the Florida premium is about 63 percent of average pay, because $243,988 divided by $390,000 is about 0.63, while the California premium is about 13 percent. Where you carry the premium, the state on your license is the largest line in your budget after your home.

Know your policy form in writing, because occurrence and claims made look identical on a certificate and differ by a six figure check at departure. An occurrence policy covers the care you gave while it was in force, whenever the claim arrives. You can leave, retire, or let the policy lapse, and the coverage for those years stands. A claims made policy covers claims filed while it runs, provided the care happened after the retroactive date of the policy. The day the policy ends, it stops answering for everything you did under it, unless tail coverage, formally an extended reporting period, has been bought to keep the reporting window open for those years. Claims made premiums also step up across the early years from a low first year toward the mature rate as exposure accumulates, which is why the tail is priced off the mature premium rather than the premium of year one.

Neither form is free. Occurrence pricing builds the cost of future claims into every year's premium. Claims made pricing defers that cost to the exit. Lisa holds employer occurrence coverage, and her case at Lisa and Mark shows what that removes: an entire category of exit cost does not exist for her household. Heidi holds claims made coverage with the tail covered by her employer, at Heidi and Spencer, which is the other safe answer. The unsafe answer is claims made with the tail assigned to you and no reserve behind it. The comparison is worked in Occurrence vs. claims made malpractice: which OB/GYN policy do I have?

The tail commonly costs 150 to 200 percent of the mature annual premium, due in a single lump sum when the policy terminates. Carriers generally bill within about two months of cancellation, which means the window to pay opens at the worst moment, between jobs or at retirement, when income is interrupted by definition. Run the band on the two ends of the AMA table and the specialty's signature number appears. Florida: $243,988 times 1.5 is $365,982, and $243,988 times 2 is $487,976. California: $49,804 times 1.5 is $74,706, and $49,804 times 2 is $99,608. Same specialty, same work, about five times the exit check, set entirely by the market in the table above. The personal version of this arithmetic is worked in My claims made policy says I pay the tail. What will it cost an OB/GYN?

Who pays depends on the exit, and the contract assigns it in advance. On resignation, the tail is most often assigned to the physician. On termination without cause or on nonrenewal by the employer, many contracts shift it to the employer, a trigger worth negotiating before signing. On retirement, death, or disability, many policies waive the tail after a minimum age and a minimum period with the carrier, terms a mid career resignation never meets. Silence in the contract defaults to you. If the tail is yours, treat it as a debt with a known size and an unknown due date: price it from the table, hold it inside the Safety Net bucket, and fund it monthly from the first year. The contracts page gives the clause its negotiation treatment.

A carrier switch is a coverage event, not an administrative one, and prior acts coverage is the mechanism that decides whether your earlier years stay covered. When a group changes carriers, the new policy can pick up your prior acts by honoring your retroactive date. That arrangement is called nose coverage, or prior acts coverage, and it keeps the old years answered under the new policy, so the old tail does not need to be bought. If the new carrier will not honor the date, the old carrier's tail must be bought at the switch instead. One of those two things must happen. If neither happens, the years under the old policy stand uncovered, usually discovered years later, in a letter.

Groups negotiate switches at the institution level, and individual physicians often learn the outcome afterward. Ask which of the two happened, by carrier name and date, and keep the answer with your policy documents for as long as the exposure runs. The mechanics are worked in How does tail coverage work when my group switches malpractice carriers? A physician buying into a practice inherits a version of the same question, priced in What does buying into an OB/GYN practice with a malpractice history cost?

A handful of states change the structure of the risk itself, through a patient compensation fund that pays above a capped provider layer. Indiana is the cleanest example. Under Indiana Code section 34-18-14-3, for an act of malpractice occurring after June 30, 2019, total recovery is capped at $1,800,000, an individual health care provider is liable for no more than $500,000, and the Indiana Patient Compensation Fund pays the amount above the provider layer up to the cap. The physician's worst day is therefore a known number when she chooses the state. Louisiana, Kansas, Nebraska, Wisconsin, and Pennsylvania also run funds or excess funds of their own designs, per the NORCAL Group overview. For any offer, ask three questions: does a fund stand behind your policy, what is your layer, and what is the cap. The fund question is worked in How does a patient compensation fund change my malpractice cost?

Behind every number on this page sits the child limitations clock. In many states the malpractice clock for a child does not start running until the patient turns 18, so a delivery performed today can become a claim nearly two decades later. That is the twenty year shadow in the title, and it explains why obstetric premiums price far above internal medicine in the same city, and why records and retroactive dates in this specialty must be kept for a working lifetime. Year one decisions still answer in year twenty.

In private practice the premium is not an expense to absorb but one of the largest overhead lines to budget, priced from your own market in the table above. Build the budget with the premium as a fixed annual line at the mature rate, a reserve for the tail if the group assigns it to the partners, and the step pattern of any claims made policy written out year by year. Where the premium is assessed to partners directly rather than paid from collections, state that plainly in the partnership documents, because the two readings differ by a five or six figure swing in a high premium state. The method is worked in How do I budget for OB/GYN malpractice premiums in private practice?

Dropping obstetrics is, among other things, a premium decision, and it reprices the second half of a career. The obstetric premium class exists because deliveries carry the long clock. A practice limited to gynecology prices in a different class, and the difference between the two classes, compounded across the remaining years, belongs in the decision beside the call burden and the income given up. Ending obstetric coverage under a claims made policy can also start a tail question at the very moment the premium falls, so time the change with the policy calendar and price the whole sequence before announcing it. Price the specialty honestly and the premium becomes what it always was: the first term of every OB/GYN financial plan.

American Medical Association, Policy Research Perspectives, medical liability premiums (OB/GYN premiums by market from $49,804 to $243,988, internal medicine in Florida at $59,736, premiums rose for the seventh consecutive year, Medical Liability Monitor data through 2025, accessed October 2026)

Physician Side Gigs, malpractice tail insurance coverage guide (tail commonly 150 to 200 percent of the mature annual premium in one lump sum, and the child limitations clock that waits until age 18 in many states, accessed October 2026)

Today's Hospitalist, tail coverage before you take that job (carriers generally bill within about two months of cancellation, accessed October 2026)

NORCAL Group, state patient compensation funds (funds or excess programs in Louisiana, Kansas, Nebraska, Wisconsin, and Pennsylvania, accessed October 2026)

Indiana Code section 34-18-14-3 (total recovery capped at $1,800,000 and provider liability at no more than $500,000 for acts after June 30, 2019, accessed October 2026)

Medscape Physician Compensation Report 2026 (OB/GYN average compensation of $390,000, accessed October 2026)

Ryan Inman is a retired financial planner who worked with about 500 physician families. He created the Financial Residency podcast (about 3 million downloads) and is no longer affiliated with it. Financial Fellowship is his sole focus. This guide is educational. Last updated October 2026.