Of the many tasks it takes to start a new private practice, having insurance is the most important. It’s a key step to shifting from an employee mindset to an owner and CEO. Owning the practice makes you liable for what happens, whether you provide the care or your employee.
Besides malpractice insurance to protect clinicians against a malpractice suit, every practice also needs business insurance. This protects you from a catastrophic event, like a fire or hurricane, as well as loss of power for a few days due to a storm. “The goal of business insurance is to protect everything you’ve worked for,” says Jennifer Cromly, Director of Strategic Partnerships at Insureon.
Cromly has seen many businesses able to stay in operation after a business interruption thanks to having the right coverage. In Connecticut, an ice storm just before Halloween causes a loss of power for her clients for days after heavy branches took out all the power in the area. And in Toledo, a tornado knocked out power for nearly a week. “If you don’t have power, you can’t give the personal care your patients depend on. A good insurance agency places you with the best carriers so you can continue your commitment to patients,” she says.
Whether you’re a solo provider offering telehealth services or a brick-and-mortar medispa with a team of employees, you’ll find in this guide what you need to know about getting insurance before you open your practice.
Protect your medical practice
Malpractice insurance, also known as professional liability insurance, protects your assets against negligence claims made against you. If a medical malpractice claim is made against you due to an accident and you are not protected, you risk personal damages and financial losses.
Malpractice insurance covers legal defense costs, settlements and judgments arising from alleged medical negligence or errors.
There are two main medical malpractice insurance policies: claims-made and occurrence-based. Claims-made policies cover claims made and reported during the policy period, while occurrence-based policies cover incidents during the policy period, regardless of when the claim is made.
In many states, medical malpractice insurance is mandatory for private practices.
Practice Overhead Insurance
This is a type of insurance coverage that protects your medical practice from financial losses in the event of a disability or injury to the practice owner or a key employee. It covers the practice expenses while the owner or key employee cannot work.
It’s important to coordinate practice overhead insurance with any individual disability insurance policy. Individual disability insurance covers the personal income of the insured, while practice overhead insurance covers business expenses. Coordinating the two ensures your personal and business expenses are adequately protected in the event of a disability.
Practice overhead insurance could make the difference between staying in business during an illness or accident and closing the practice.
Business Owner’s Policy
If you own or rent a space for a brick-and-mortar healthcare practice, a business owner’s policy (BOP) can help you save money by bundling multiple policies. A BOP includes general liability insurance and commercial property insurance.
BOPs are flexible, so you can bundle it with other policies you need for your private practice. Some examples include the following:
- Business interruption insurance: Protects your practice from financial losses resulting from a temporary suspension or interruption of operations from a natural disaster.
- Data breach insurance: Cybersecurity insurance protects you against financial losses and liabilities arising from cyber attacks, data breaches or other cybersecurity incidents. As a private practice, storing patient data, email addresses and credit card information puts you at risk for a cyber attack.
- Business renter’s insurance: Covers your rented space from a fire, vandalism or severe damage.
- Property insurance: If you own your medical office, property insurance protects your physical assets against damage or loss caused by covered events. This includes the building, equipment, furniture and supplies. This helps you recover financially and rebuild in the event of a covered incident.
- General liability: Provides coverage for damage to the property, a patient who slips and falls, damage to a patient’s property and damage to the rented property. General liability insurance is always required if you rent a space.
Protect your employees
Employee health insurance
Whether you are a solo provider or have multiple employees, employee health insurance protects you and your employees in the event of illness or injury.
Having good employee health insurance helps to attract and retain talented staff. Many states require businesses with 50+ employees to provide health insurance coverage as part of their benefits package.
When choosing an employee health insurance plan for your practice, consider cost sharing, deductibles, copayments, coinsurance and out-of-pocket maximums. Additionally, consider whether the plan covers major medical care, such as hospitalization and specialist visits.
Workers’ compensation insurance
Workers’ compensation insurance covers medical costs, rehabilitation expenses and lost wages for employees injured or ill while on the job. It also provides you with financial protection if an employee sues you due to an injury or illness at your practice.
Workers’ compensation is required in almost every state. Failure to comply with the regulations can result in legal action against your practice.
Disability insurance provides income replacement if you cannot work due to a medical condition or injury. Disability insurance helps pay for ongoing living expenses such as rent or mortgage payments, utilities, food and health care costs.
When choosing disability insurance, it’s important to consider the type of coverage you need and the benefits you want to receive. Short-term disability (STD) covers up to two years in case of illness or injury. Long-term disability (LTD) offers protection for five years or more and can provide additional benefits such as rehabilitation services. Be sure your policy covers mental and physical illnesses or injuries, so you’re covered no matter what happens.
Other insurance policies to consider
Life insurance protects your loved ones financially in the case of your early passing. As your family and/or expenses change over the years, you should reevaluate the amount of life insurance coverage you need.
Needlestick insurance, or accidental occupational insurance, protects you from needlestick and sharps injuries and blood and bodily fluid exposure.
Most clinicians starting and running a private practice experience times of stress that are common for small business owners. An insurance incident doesn’t have to be one of them.
Get medical practice insurance that works for you. CM&F offers professional liability insurance to over 150 healthcare professionals. All our coverage options are available online, allowing our clients to obtain liability insurance coverage within minutes. Click here to learn more about business insurance from our partner, Insureon. Every CM&F policy offers 24/7 portable coverage, whether you are full/part time, a volunteer, telemedicine/telehealth practitioner, or contractor – we’ve got you covered.