Jeffrey Wade
Doctors require insurance to protect their assets and livelihood. While medical malpractice insurance is a common form of insurance for doctors, there are other types of insurance that doctors may require, such as insurance against fire, hacking, and employee theft or misconduct. In some cases, doctors may work for insurance companies, where they may serve as medical directors or consultants. These physicians typically have experience in clinical practice and may find that their skills are transferable to the insurance industry.
| Characteristics | Values |
|---|---|
| Largest physician-owned medical malpractice insurer | The Doctors Company |
| Provider of insurance and risk management solutions | The Doctors Company |
| Physician disability insurance | AMA Insurance |
| Coverage for physicians | $15,000 per month |
| Coverage for medical students | $41 per year |
| Business overhead expense (BOE) policy | AMA Insurance |
| Premium structure | Flexible |
| Rate reduction for AMA members | 35% |
| Rate reduction for non-members | 10% |
| Coverage limit for office overhead expense insurance | $20,000 per month |
| Coverage duration of a bond | 3 years |
| Cost of a bond | $500 |
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What You'll Learn
Medical malpractice insurance
The Doctors Company, the nation's largest physician-owned medical malpractice insurer, offers risk management solutions to help healthcare professionals and practices reduce risk and improve patient care. They have been in the business for over 45 years and are trusted by many. Their acquisition of ProAssurance further enhances their expertise in patient safety and risk management.
Additionally, physicians may also consider other types of insurance to protect their practice and partners. Business overhead expense (BOE) policies, for example, reimburse practice owners for operating expenses if they become disabled and unable to work. Disability buyout (DBO) insurance is another option that provides funds to buy out a disabled partner's ownership interest if they can no longer actively participate in the practice. These policies are structured with multiple installments and are determined when the policy is purchased, aligning with the provisions in the buy-sell agreement.
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Disability insurance
Additionally, disability insurance policies can include various riders or optional provisions that enhance coverage. For instance, a residual disability or partial benefit rider provides partial benefits if an individual returns to their occupation part-time or experiences a partial disability. This rider typically requires an income loss of at least 20% compared to pre-disability earnings. Another optional provision is the student loan protection rider, which assists in paying off student loans during the benefit period if the insured becomes disabled.
Furthermore, disability insurance policies can be structured in different ways. Group disability plans are often provided by medical employers and offer basic benefits. However, they may not be sufficient for physicians with higher incomes, and the benefits may be subject to taxes. As a result, many doctors opt for individual coverage, which provides more flexibility in tailoring the policy to their specific needs and remains with them as long as premiums are paid.
When considering disability insurance, it is recommended to consult a professional insurance adviser or financial planner specialising in working with physicians. They can guide you in navigating the different policy options, costs, definitions of disability, and available riders to ensure you obtain the most suitable coverage for your specific needs and medical specialty.
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Business overhead expense insurance
While the number of doctors working in physician-owned practices has dropped in recent years, many doctors still work in small practices that they own. This means that these doctors are also business owners and have additional insurance needs.
Business overhead expense (BOE) insurance is a type of insurance that provides critical coverage for small business owners, including physicians who own their practices. It helps to cover the expenses of operating a practice if one of the practice owners is unable to work due to a serious disability. This includes typical monthly expenses such as employee salaries, payroll taxes, insurance premiums for employee benefits, rent, utilities, taxes, property taxes, office equipment expenses, and accounting fees.
The benefit period for BOE insurance usually lasts for 12 to 24 months, giving the business owner time to recover and return to work or make another plan for the business. During this time, the disabled physician's premiums will be waived, and their coverage will continue at no cost while they receive benefits.
There are several providers of BOE insurance, including the TMA Member Business Overhead Expense Plan issued by The Prudential Insurance Company of America, which offers a benefit of up to $50,000 per month. Another provider is AMA Insurance, which offers coverage of up to $20,000 per month, with a 35% rate reduction for members and a 10% rate reduction for non-members for at least the first year of coverage.
In addition to BOE insurance, there are other types of insurance that physician-owned practices may want to consider, such as disability buyout (DBO) insurance, which helps provide funds to buy out a disabled partner's ownership interest if they can no longer fully participate in the practice.
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Fidelity bonds
The cost of a fidelity bond is determined by various factors, including the policy limit, the amount of sensitive information handled by the company, and the number of employees with access to that information. Policy limits can range from as low as $5,000 to as high as $10 million, with a median premium of $1,055 per year, according to Insureon. Deductibles, which are deducted from claim payments, also influence the cost, with common deductibles ranging from $10,000 to $50,000.
It is important to note that fidelity bonds do not provide comprehensive small business insurance coverage and are distinct from commercial property insurance, which covers physical assets, and surety bonds, which involve three parties and guarantee the fulfilment of a contract.
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Commercial property insurance
Property and general liability insurance are often offered together, with general liability coverage protecting against events that occur on the premises. For example, if a patient were to slip and fall in the clinic, general liability insurance would cover the legal and compensation costs. It is important to note that general liability insurance does not typically cover liability resulting from professional services, employment practices, or workers' compensation injuries.
For doctors who own their practices and have employees, independent contractors, or other acting on their behalf, vicarious liability coverage is also recommended. This type of insurance covers the acts or omissions of those representing the practice, as the business owner could be held responsible.
Additionally, there are other types of insurance policies that doctors who own their practices may want to consider to protect their business and personal assets. Business overhead expense (BOE) policies, also known as office overhead expense policies, reimburse the expenses of operating a practice if one of the owners becomes disabled and cannot work. This can help cover immediate business and personal expenses, as well as the cost of buying out a partner with a long-term disability.
Disability insurance is another important consideration for physicians, as it provides income protection if they are unable to work due to an injury, illness, or other disability. This type of insurance can help cover living expenses and ensure that the physician can still collect full benefits even if they can no longer work in their specific medical specialty.
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Frequently asked questions
Doctors practicing medical insurance refers to physicians who work for insurance companies, often as medical directors. They may review charts, manage claims, and provide medical expertise to insurance companies.
Some doctors may transition to working for insurance companies due to fatigue from clinical medicine. Working for an insurance company may offer less stress and more flexibility, as well as the ability to work remotely.
Doctors working for insurance companies can utilize their medical knowledge and expertise in a different capacity. They can contribute to medical research, education, and consulting, as well as claims management and policy development.
There is criticism that insurance companies, with the input of doctors, practice medicine without accepting the associated liabilities. This can result in delayed or denied access to necessary treatments and medications for patients.
It is quite common for physicians to work for insurance companies, especially after gaining experience in clinical practice. Organizations such as the American Academy of Insurance Medicine (AAIM) cater specifically to physicians working for insurance companies, offering education and professional support.
