Doctors: Insured Or Not?

Doctors have significant financial responsibilities and are therefore encouraged to take out insurance to protect themselves, their practices, and their loved ones. Medical malpractice insurance, also known as professional liability insurance, is the most well-known type of insurance for doctors, protecting them from most risks. However, doctors may also require other types of insurance, such as disability insurance, critical illness insurance, and long-term care insurance, to safeguard their financial health and that of their dependents.

Medical malpractice insurance

There are two basic types of medical malpractice insurance policies: claims-made and occurrence-based. Claims-made policies offer coverage for a defined length of time, whereas occurrence-based policies provide protection regardless of when a claim is filed, even if it is years after the incident or after retirement. Claims-made policies are typically more affordable, while occurrence-based policies are more comprehensive and, consequently, more expensive.

The cost of medical malpractice insurance depends on factors such as professional specialty, previous claims, and policy limits. The recommended amount of coverage is typically in line with what other doctors in the same specialty and geographic area carry, which can range from a few hundred thousand to a couple of million dollars. For example, a policy described as $1M/$3M provides coverage of up to $1 million per claim and a total of $3 million per policy year.

In addition to medical malpractice insurance, doctors may also consider other types of insurance, such as disability insurance, homeowner's insurance, and umbrella insurance, to protect against various financial risks.

General liability insurance

Doctors face a multitude of risks and liabilities in their profession, and general liability insurance is one of the key types of insurance they should carry to protect themselves and their practices. General liability insurance is a critical component of risk management for doctors, and it provides coverage for a range of potential issues.

The coverage provided by general liability insurance typically includes patient and visitor injuries, such as slips and falls, and the associated medical expenses and legal costs. It also extends to property damage, covering the repair or replacement of items that are lost or damaged while in the care of the healthcare business. Additionally, general liability insurance provides protection against advertising injuries, including libel, slander, and copyright infringement. This aspect of the insurance is particularly relevant in the context of promotional activities and ensures that doctors are not held liable for unintentional similarities to existing campaigns or slogans.

In conclusion, general liability insurance is a vital component of risk management for doctors and healthcare professionals. It provides a safety net against common business risks and liabilities, ensuring that doctors are protected against financial losses and legal repercussions. By investing in this type of insurance, doctors can focus on providing quality care to their patients while having peace of mind that they are protected against unforeseen events and potential lawsuits.

Commercial property insurance

The cost of commercial property insurance depends on various factors, including the value of the business property and assets, the location of the business, the construction of the building, and the industry. It is not required by law but is considered essential for most small businesses. Commercial property insurance rates can vary, with a median cost of around $67 per month or $800 per year.

When determining the value of business property for insurance purposes, insurance companies use three methods: actual cash value, replacement cost value, and fair market value. Actual cash value takes into account depreciation and is calculated as the cost to replace an item minus its depreciation. Replacement cost value refers to the amount needed to repair, replace, or rebuild property with comparable materials and quality without deducting depreciation. Fair market value is the cost of an item if it were to be sold on the market.

Business interruption insurance

In addition to financial coverage, business interruption insurance may also assist with relocation costs if the practice needs to move to a temporary location while repairs are being made. This type of insurance can provide peace of mind and help maintain financial stability during unexpected disruptions.

It's important to note that business interruption insurance does not cover all types of events. Standard policies typically exclude coverage for broken items resulting from a covered event, flood or earthquake damage, undocumented income, and pandemics or communicable diseases.

The cost of business interruption insurance can vary depending on various factors, including the size of the medical practice, its location, revenue, and the chosen coverage levels. It is usually added to an existing insurance policy as an add-on or rider rather than being sold as a separate policy.

Workers' compensation insurance

Doctors who own their practice or employ other doctors, nurses, or administrative staff, typically need to carry workers' compensation insurance. This type of insurance is legally required in almost every state in the US. It covers medical bills and lost wages if an employee is injured at work or becomes ill due to job-related exposure. It also protects employers from being sued by employees for these issues.

There are doctors who specialize in treating work-related injuries and illnesses, and they usually participate in Workers' Compensation Networks, Plans, or MCOs. They also have experience in evaluating and treating work-related injuries.

Frequently asked questions