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Insurance For Medical Practices

Insurance Essentials For Medical Practices

If you are a private medical practitioner, you must be aware of the unique risks faced by your business. As soon as you open your doors, certain liabilities become inevitable.

No matter how may precautions you take, there is always a possibility of an unforeseen event costing you significantly. Here are the main insurance plans for medical practices you need to know about:

Professional Liability Insurance

Professional liability insurance, also known as malpractice insurance, safeguards your medical practice in case a patient files a lawsuit against your practice. This insurance policy takes care of the legal defense and settlements, which could be a substantially large amount.

Professional liability insurance for medical practices protects you against negligence claims filed against your business. As general liability insurance does not just safeguard a business against malpractice, negligence, or misrepresentation claims, professional liability insurance offers vital coverage as well, such as:

Work Mistakes and Oversights

A simple mistake can often result in financial losses for your clients. In case a patient sues your practice over an error, professional liability insurance can take care of the legal defense expenses.

For instance, you may mistakenly prescribe a patient a medicine they are allergic to. Professional liability insurance will compensate for the legal costs if the client files a lawsuit against your practice.

Accusations of Neglect

Doctors and nurses at your medical practice may be prone to claims of negligence. For instance, a patient can claim that their bed sores were a result of nurse’s neglect. If they end up suing your medical practice for this, professional liability insurance will take into account the legal costs, such as that of hiring a lawyer.

Poor Advice or Incorrect Diagnosis

If a doctor at your medical practice makes a wrong diagnosis or a physical therapist gives poor advice, a patient’s condition could deteriorate. In such a scenario, if a patient sues your business and you lack adequate insurance coverage, you may have to pay for legal defense by selling your assets.

Commercial Property Insurance

Commercial property insurance for medical practices is vital for safeguarding your medical practice against explosions, burst pipers, fire, vandalism, and theft. Location, occupancy, and construction are some of the crucial factors that determine the amount needed to purchase a commercial property insurance policy.

The coverage provided by this insurance for medical practices is akin to that of property insurance for consumers. However, your business can consider the monthly premiums paid for commercial property insurance as an expense.

Factors to Consider

As far as the price of this insurance policy is concerned, the value of assets, such as the premises, is a major factor. As a doctor owning a private medical practice, it is, therefore, important for you to calculate all physical assets present at your practice. Here are the prime factors that are typically considered:

Location

Location is a crucial factor when it comes to commercial property insurance. If your business premises has adequate fire protection, commercial property insurance is likely to cost less than premises with lower fire protection.

If the building in which you operate in consists of potentially combustible materials, you may have to pay higher premiums as opposed to practices in buildings created from fire-resistant materials. Particular add-ons to the structure of your premises can boost its fire rating. Therefore, it is important to discuss with an insurance provider if you ever plan to revamp your space.

Occupancy

The way a building is used also influences its fire rating. For example, an office building may be rated higher than an auto repair shop or restaurant, where fire hazards are more likely. In a building with many tenants, even a single dangerous occupant can cause the fire rating to plummet.

Fire and Theft Protection

Fire and theft protection takes into account the extent to which your medical practice is protected from fire. Facts like distance to the nearest fire station and the presence of fire alarm or sprinkler system in your building can play a key role in arriving at the value of your insurance deal.

Coverage

Commercial property insurance is designed to adequately protect your building, furniture, tools, instruments, and inventory at your medical practice. It offers a financial cushion in case:

  • A thief enters your medical practice and steals equipment.
  • Computer systems get broken or destroyed by fire.
  • Property damage resulting in the loss of income.
  • A lightning strike destroys your business premises for which you already carry business renters insurance.

Commercial property insurance policy can be customized to suit your medical practice. Add-ons can include the expense of:

  • Reproducing important documents that were spoiled
  • Moving crucial records to a different venue in order to prevent loss
  • Providing provisional storage

Workers’ Compensation Insurance

Even though you may tick off all precautionary measures to ensure that your medical practice offers a safe environment for your employees, you may not be able to eliminate the prospect of every accident. Workers’ compensation insurance for medical practices pays for the medical costs and lost wages due to work-related injuries and sickness.

Coverage

If your employees get hurt during work or contract an illness at the medical practice, workers’ compensation insurance can provide medical benefits and compensate for the salaries they missed out on. The coverage offered by the policy includes:

Medical Expenses

Workers’ compensation insurance takes into account the medical costs arising from a work-related injury. This pertains to visits to the emergency room and costs of surgery and prescriptions.

Missed Salaries

If a worker wishes to take a few days’ leave due to a work-related injury or illness, workers’ compensation insurance can pay for some of the lost wages. For example, if a staff member slips on ice and needs medical attention for a few days, workers’ compensation policy can offer financial compensation.

Ongoing Care

It is possible for work-related injuries to be so severe that they require more than one type of treatment. For example, if a staff member hurts their back while lifting a box of heavy instruments, medication and physiotherapy costs can be taken into account by a workers’ compensation insurance policy.

Illness

At times, allergens and dangerous chemicals at your medical practice can be a cause illness for the staff members. If an accident occurs because of them, this insurance policy can pay for the relevant treatment.

Business Interruption Insurance

When you start any business, buying cover for fire and windstorms is rather important. This is a type of property insurance for medical practices that takes into account the income lost in case you and your employees are forced to vacate the property that is damaged or destroyed by covered disaster.

This policy is different from traditional property insurance as it considers income lost if the business needs to be temporarily closed or the premises needs to be rebuilt as a result of a disaster. Here are some important details regarding the coverage:

Loss of Revenue

In case of a temporary halt in business activities, business interruption insurance compensates for the loss of revenue. The policy typically offers financial support to businesses for up to a year. This enables businesses to survive temporary impediments that would otherwise have forced them to shut down for good.

Staff Salaries

Although a disaster may result in a temporary business shutdown, you would most likely wish to retain your workforce during this time. Business interruption insurance would take care of your payroll as long as your medical practice is not generating revenue.

Rent of Lease Payments

If your business premises is rented, you are liable to pay rent even when your business in temporarily closed. Business interruption insurance can take into account your rent or lease while you are making plans to reopen. In case you have purchased the premises and have mortgage payments to make, business interruption insurance would cover those as well.

Loans

You may have taken some business loans before temporarily closing your doors. Even if you are not making money for the time being, your bank would still expect loan payments. Business interruption insurance would pay a portion of the loan payments to give you time to recover.

Taxes

Tax obligations must be met – even if your business is at a halt for a while. With business interruption insurance, you would acquire the amount required to pay the taxes you owe. Similar to majority of business insurance policies, a business interruption insurance policy is also tax-deductible.

Business Owner’s Policy

Business owner’s insurance for medical practices combines general liability insurance with commercial property insurance. It usually costs a lesser amount than buying the two policies separately.

There are many risks associated with operating a medical practice, for instance, someone slipping while walking through the door or fire breaking out and destroying expensive medical equipment. Here is an overview of the coverage provided by a business owner’s policy:

Damage to Business Property

The commercial property insurance aspect of a business owner’s policy effectively protects damaged, stolen, or vandalized business property. It takes into account damage to business premises (if owned), furniture, and medical equipment.

Patient Injury and Property Damage

The general liability aspect of a business owner’s policy can cover the legal expenses pertaining to property damage or third-party injuries. For example, it can provide financial compensation in case a patient slips and falls on a freshly waxed floor.

Advertising Injuries

Advertising injuries are also covered by the general liability part of a business owner’s policy. They include defamation (such as libel and slander), and brand or copyright infringement. For instance, if your staff member publishes a poor review about a rival medical practice, this insurance policy can finance your legal defense.

Forced Closure

In case of a fire or some other damaging event, you may have to temporarily shut down your business practice. A business owner’s policy can come into play here by compensating for lost income.

For instance, you may have to close the doors of your medical practice due to a tornado in your area. While your premises is being renovated, a business owner’s policy can take care of the operating expenses, such as staff wages, rent, and utility bills.

Cyber Liability Insurance

This safeguards your business against a malicious software attack or data breach. It takes into account expenses such as credit monitoring, customer notification fines, and legal fees.

Cyber liability insurance for medical practices provides coverage regarding regulatory fines and penalties, data breach lawsuits, and business interruption and recovery costs. Cost of this insurance policy depends upon your healthcare specialization, extent of cyber risk, the nature and amount of sensitive data you have, and your coverage limits.

There are two broad types of cyber liability insurance coverage:

First-Party Cyber Liability Insurance

This takes into account the costs associated with patient data breach at your medical practice. The coverage includes the expense of informing your clients about the breach and the related fines. It can compensate for data breach expenses like:

  • Investigations regarding cyber incidents
  • Informing about data breach
  • Data security measures
  • Cyber extortion demands
  • Credit monitoring services for affected clients
  • Public relations

Third-Party Cyber Liability Insurance

Your medical practice is likely to be responsible for safeguarding the health records of your patients. If your system is breached, your business may be at risk of a lawsuit, even if belongs to another company.

For example, if a cyber-criminal breaches your medical practice’s database and a patient files a lawsuit against your business, cyber liability insurance can offer coverage for:

  • Court expenses
  • Attorney fees
  • Judgments or settlements

Final Word

If you are a medical practice owner, recruiting the right staff and owning advanced equipment are not the only factors required for sustainable growth. It is vital to safeguard your practice and your employees from various expected and unexpected events. Insurance for medical practices can adequately protect you from theft, fire, disaster, and data breaches.

AC Insurance has been providing top quality insurance policies for medical practices since 1991. Click here to get a free quote today!


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