What’s the Best Insurance Coverage for Your Practice?
All medical practices carry insurance policies to protect them against risk. Foremost among these in many physicians’ minds is medical malpractice insurance coverage. While important, this isn’t the only insurance you need to protect your practice. It’s key to assess where your practice lacks coverage — and whether your current coverage is worth the price.
What You Should Have
Every practice should carry policies that cover general liability — for equipment, furnishings, autos and so forth. In addition, your practice should have insurance policies for nonowned auto, workers’ compensation and bond for ERISA fiduciary liability. It’s important to carry employment practices liability insurance to cover management decisions related to employees, and you’ll need policies for directors and officers’ liability to cover decisions by board members. Last, but not least, your practice should carry professional liability insurance for various forms of medical malpractice.
You also may want to consider other coverage, including:
- Life insurance for your key officers or as an employee benefit,
- Long-term care,
- Short- and long-term disability,
- Privacy violations coverage, and
- Umbrella insurance for both personal injury and property damage.
Whether you choose one or all, each of the above is designed to protect your practice — and its key physicians.
First, take inventory of current coverage, and compare your desired coverage with the list above. Identify where your practice has too much, or too little, protection.
Ask yourself: What are the policy deductibles? What share of a claim would the practice be willing to pay? Do current policy limits fit the potential for loss? Are policies keeping up with the practice’s evolving technologies? Last, do any policies have overlapping coverage for the same risk?
Prepare a Matrix
Once you understand the coverage you have, work with your financial consultant to prepare a matrix of coverage tailored to your practice’s current and future needs and its owners’ wants. Pay special attention to what’s essential for the practice, what’s required by law or contract, and what should be offered as a benefit to employees or owners.
Describe what’s covered by each policy, the term of coverage, dollar limits and deductibles, and current carriers and potential alternatives.
Evaluate the Most Cost-Effective Coverage
With an idea of the protection needed, solicit bids from highly rated insurance carriers. Evaluate the bids that offer the most cost-effective coverage.
If your practice can’t afford the entire package of policies at one time, rank them according to the level of risk that they manage. Then, purchase the highest priority packages first and other types of policies as you can afford them.
It’s easy to put insurance coverage on the back burner, allowing it to lapse or become outdated. Although this might not appear dangerous, a lapsed policy can cause severe damage in the event a claim isn’t covered. Don’t take the risk of losing your practice because your insurance policies haven’t evolved with your business. Cover all the bases — assess your practice’s insurance needs with the help of a financial consultant on an ongoing basis and make adjustments as needed.