Insurance is like a layer of clothing put on to protect you from the elements. The difference is, where meteorologists can alert us to upcoming precipitation or sudden drops in temperature, medical practice principals have no forecaster to tell them when—or what type—of trouble may lie ahead for their businesses. So the question becomes, “Do I have enough coverage to protect my practice? Or, do I have too much?”
Following is a breakdown of the various types of coverage available to protect you, your staff and your facility in the event of a claim or catastrophe.
When opening a private medical practice or medspa you should have at minimum: workers’ compensation, general and professional liability insurance, property coverage, HIPAA compliance coverage and sexual molestation coverage (typically excluded unless you purchase a Rider, which is a provision of an insurance policy that provides additional benefits at an additional cost).
Sexual molestation coverage may seem out of place, but facilities that perform medical exams and those that offer services such as facials and massage are vulnerable to claims of inappropriate touching or contact.
Protecting Your Providers and Employees
Workers’ compensation provides wage replacement and medical benefits to employees who are injured on the job. According to Jay Candelario of CHRS at Candelario Insurance Advisors, the benefit of workers’ comp coverage is that it relinquishes the employee’s right to sue his or her employer for the tort of negligence. Workers’ comp is typically mandatory for all businesses that hire employees, but the requirements vary by state. So it is important to check with your state to make sure you understand your responsibilities—in some regions, even independent contractors need to be covered.
Professional liability insurance, also known as errors and omissions (E&O) insurance, covers businesses that offer professional and personal services. For physicians this would include medical malpractice. Professional liability insurance protects you and your practice in the event that a patient or client is harmed as the result of a service or advice provided by your medical staff.
Professional liability also covers services that fall outside the scope of medical malpractice, such as procedures performed outside of a physician’s normal area of expertise and services provided by nonmedical personnel.
When comparing liability coverage, pay attention to whether the policy is “Claims Made” or “Occurrence-Based.” With an occurrence-based policy, coverage is based on when the procedure was performed, whether or not the policy is in place at the time of the claim. With claims made coverage, the claim and treatment that triggered the action need to happen during the policy period. For example, if a patient files a suit against your practice in January 2015 for an infection related to a laser treatment they received in July 2014, but you switched insurance companies in December 2014, you aren’t covered for this claim and could be forced to pay out of your own pocket if you are found negligent. If you are switching from one claims made provider to another, you need Tail coverage. This covers claims from a previous policy.
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