When the agency folded, 1,200 clinicians lost their malpractice cover without being told
It happened fast. A large medical staffing agency, the employer of record for more than 1,200 physicians and other clinicians, went into receivership. Its professional liability policy was cancelled with it. The clinicians on that policy were still seeing patients the next morning. Most of them did not know that, as far as a future lawsuit was concerned, they were now on their own.
We first wrote this up in February 2025, while it was still unfolding. This is the story of what Homewood did about it, and of the questions it should make every agency-employed clinician ask.
Why a cancelled policy meant no cover at all
The agency's policy was claims-made. A claims-made policy responds only to claims reported while the policy is in force. Cancel it, and a claim that arrives next month for care given last year has nowhere to go. An occurrence policy would have kept answering for anything that happened during the policy period, however late the claim came. The agency had bought the claims-made form, as most employers do, and the receivership turned that choice into a gap under every clinician on the roster.
Malpractice claims arrive late. A patient's lawyer can file years after the care, and the clinicians had years of care behind them, all of it now uninsured for any claim not already reported. Nobody at the agency was in a position to tell them.
What Homewood did
We saw the writing on the wall and moved quickly:
- We told the clinicians. A direct campaign by email, text and phone to every affected provider we could identify, explaining what a claims-made cancellation meant for them and what the options were. The longer they stayed uninformed, the longer they stayed uninsured.
- We went back to the original carrier. The insurer that had written the agency's policy already knew the roster. We negotiated tail coverage for the individual clinicians, an extended reporting period that keeps the cancelled policy answering for claims made after it ended, and the carrier agreed to a streamlined application so approvals moved without the usual paperwork.
- We built a workflow for the volume. Hundreds of enquiries came in at once. Each one went to the underwriter through the same short process, and every follow-up carried the same message: act now, because the clock on a claims-made gap only runs one way.
What came of it
Of the roughly 1,200 affected clinicians, more than 430 contacted us about cover, and just under half of those bought tail. That is a minority of the roster, and it bothered us at the time. Then the inevitable happened. A malpractice lawsuit was filed against doctors in the affected group, for care given under the old policy. The doctors named had bought tail. The carrier stepped in and their defence was covered. Had they not acted, they would have been answering that suit personally, with their savings and their careers on the line.
For the clinicians who acted, the tail premium was the difference between a defended claim and financial ruin. It also stopped the receivership turning into a blame game between the hospitals, the receiver and the carrier, with a cascade of lawsuits behind it.
The four questions to ask about your own cover
If you work through a staffing agency, a locums company or any employer that holds the malpractice policy on your behalf, ask these before you need to:
- Is the policy claims-made or occurrence? Most employer policies are claims-made.
- What happens if the employer stops paying, or stops existing? The honest answer is usually that the policy lapses and your prior acts are uninsured unless someone buys tail.
- Who buys the tail, and what would it cost? Tail is priced as a percentage of the expiring premium. A one-year tail is about 100% of it, and longer reporting periods cost more. Knowing the figure in advance is what lets you act in days when it matters.
- Does your contract give you the right to buy tail yourself if the employer will not, or cannot?
A clinician who can answer those four questions is not exposed to someone else's bankruptcy. Our tail coverage page explains how extended reporting periods are priced and bought, and the staffing agency insurance page covers the policies an agency should be carrying for the people it places.
