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In the health care industry, liability risks are high, as a practitioner’s work can impact the health and well-being of their patients. When dealing with something as important as health, it’s crucial to make sure your professional practice is equipped with the right insurance coverage.
Health Care Business Insurance Types
General liability insurance protects against third-party liability as a result of accidental property damage or bodily injury. For health care businesses, this is an important and basic coverage to secure. Accidents can happen at any time, and if an injured individual sues your business and holds you liable for damages, it could be financially disastrous.
If your clients or patients spend time at your business property, or if you or your employees make visits to customers’ homes or offices, you’ll want to make sure you’ve got this basic protection in place. In addition to covering third-party bodily injury and property damage, general liability insurance also extends coverage to personal and advertising injury, including claims of libel, slander, and copyright infringement.
- A client is visiting your acupuncture clinic for a scheduled appointment. As he walks into your lobby, the client trips on a loose piece of carpet. He falls and knocks into the reception desk, fracturing his wrist in the process. Your general liability insurance would cover any medical fees for the injured client, as well as damages and legal expenses if the client decides to sue.
Medical malpractice insurance protects against claims of medical negligence and wrongful practices. This includes patient claims of bodily injury, medical expenses, and property damage. For many health care practices, this is a crucial and often required coverage (depending on your state) to protect against liability in your professional work, as even a small mistake could lead to a financially devastating patient lawsuit.
A variety of errors or omissions could lead to a medical malpractice suit, from misdiagnosis to performing unnecessary surgery to misreading lab results. Even if you’ve done nothing wrong, a patient could still sue your business if they believe that you were negligent in your professional duties. Medical malpractice insurance can help cover the costs of defending against a lawsuit, in addition to providing for any settlements or damages.
- You perform a mammogram on a patient who says she feels a lump in her breast. After examining the scans, you believe she simply has a clogged milk duct and it will go away in a few weeks. The patient comes back a month later, and the lump has grown. Your diagnosis was incorrect and the patient is diagnosed with cancer. She must undergo aggressive chemotherapy treatment. She later sues you for negligence.
Commercial property insurance protects the value of your business property from damage or destruction by a covered peril. Commonly covered perils include fire, lightning, windstorm, explosion, theft, and vandalism, and covered property typically includes buildings, equipment, supplies, furniture, and more.
For professionals in the health care industry, you likely own or lease a commercial building or office for your practice. Additionally, you may have high-value medical equipment, furniture, computers, or other supplies. If a disaster strikes and this property is damaged, commercial property insurance can step in to provide funds for repair or replacement.
- A wildfire burns through your area and damages your dental office. There is serious structural damage to your property, and you must rebuild. Commercial property insurance would cover the costs of rebuilding your office.
Workers’ compensation insurance provides financial and medical benefits for employees of your business who are injured or fall ill on the job. In the health care industry, making sure your employees are healthy and well is likely top of mind. If an employee were to be injured and unable to work, workers’ comp could cover their medical expenses and a portion of their income while they are recovering.
Not only is workers’ compensation an important safety net for your employees, but it is also required in almost every state. While specific guidelines around covered injuries and benefit amounts vary by state, in general, if you hire employees, you should secure this coverage. Without it, your employees may be missing vital workplace protections, and your business could be fined for failing to provide coverage.
- An employee at your physical therapy clinic is moving a treadmill to another area of the building. While lifting the treadmill, the employee strains his back, causing a severe injury. He requires medical attention and is unable to work for at least 6 weeks. Workers’ compensation insurance would cover his medical expenses as well as a portion of his income while he is recovering.
Cyber liability insurance protects your business from the financial consequences of cyberattacks, data breaches, and other cyber threats. In the health care industry, you likely deal with incredibly sensitive data on your clients, including medical histories, contact information, and other protected health information. If this information is stolen, you may be sued. Cyber liability insurance can provide the funds to defend your business in a lawsuit, as well as any expenses necessary to recover from a cyber event.
- Your computer network is compromised by hackers, who have stolen your customer data records. This includes medical histories, insurance data, and payment information. Cyber liability insurance would cover the costs of notifying your customers, recovering the data, and addressing any patient lawsuits.
Commercial crime insurance can help protect your business from losses that result from crimes such as theft, burglary, and fraud. For health care professionals, crime risk comes primarily from internal actors, like your employees. With access to medical supplies and inventory, medication, money, and other valuables, employee theft and dishonesty is a real threat. While thorough background checks and security measures can help, it’s no silver bullet. Commercial crime insurance can provide the protection you’ll need if your business suffers losses due to crime.
- You discover that an employee at your pharmacy has been stealing medication, including oxycodone and other opioids, and selling them illegally. Commercial crime insurance would cover the losses.
Additional Insurance Coverage
Depending on the specific type of health care business you operate, there may be other relevant insurance types worth purchasing. Below are a few to consider.
- Commercial auto insurance provides protection against physical damage for company-owned or leased vehicles, as well as liability protection in the case of an at-fault car crash. If you or your employees drive vehicles for work purposes, commercial auto insurance coverage is an essential protection, and minimum levels of auto liability coverage are required in most states.
- Business income insurance provides coverage for lost income and operating expenses if your business is forced to close due to a covered peril, such as fire, storm damage, or other property damage. Many health care professionals rely on their physical spaces to do business, and if your business must close temporarily due to property damage, you may still have ongoing expenses like payroll and rent. These costs can be covered by business income insurance.
- Employment practices liability insurance (EPLI) provides financial protection for your business against lawsuits by current, past, or prospective employees accusing your business of wrongful treatment such as discrimination, harassment, or other employment-related issues.
Insurance Coverage for Your Employees
Part of protecting your business also means providing the right coverage for your employees. You can sponsor group insurance plans for your employees to provide financial protection in their time of need. A comprehensive employee insurance plan can also serve as a way to attract and retain top talent.
Group health insurance helps your employees pay for medical and healthcare expenditures, including everything from primary care to hospitalizations and surgeries. Offering health insurance to your employees can not only keep your employees in better health, but it can also help to retain your employees. In the health care industry, health coverage is not only an important need, but it is also core to your business. Many prospective employees will be looking for health coverage as part of a compensation package.
Group life insurance provides a financial payment to an employee’s family or other survivors if the employee unexpectedly dies. The death does not have to be work-related. Although individuals can purchase life insurance on their own, as an employer-sponsored group, you can usually obtain better rates than an employee could get on their own.
Group disability insurance provides income to employees who cannot work as a result of non-work-related injuries.
What health care businesses need insurance?
Business insurance is a critical and important part of any health care professional’s risk management strategy, and many types of insurance may be required by your local state laws. Whether you run your own private physician practice and are exposed to myriad risks, from medical malpractice to premises liability, or work as a home health care provider and are looking for coverage for your work vehicle, there are a variety of business insurance policies and insurers that can suit your needs.
If your business meets any of the following criteria, you should consider investing in business insurance:
- You provide medical advice or services
- You own or lease commercial space
- You host members of the public on your business property
- You travel to your clients’ homes or offices
- You own or lease a company vehicle or use your own personal vehicle for your business
- Your business owns valuable property, such as medical equipment
- You accept payments via a health insurer or Medicare or Medicaid
- You employ others
Commercial insurance can cover a wide variety of health care professionals. Some common businesses and professions that need insurance include:
Choosing an Insurance Company
The first step in acquiring insurance for your health care business is finding the right insurance company to partner with. Below, we’ve highlighted a few of our trusted insurance partners, who offer a variety of coverage suitable for health care professionals. We’ve also included a few factors that are important for your business to consider when evaluating insurers.
|Provider||General Liability||Professional Liability||Business Owner's Policy|
Financial strength. While you may think getting the best-priced policy should be your main goal, it is more important to ensure you purchase insurance from a financially stable provider. It’s worth remembering that insurance claims are paid directly from the finances available to the insurance company. In other words, if the insurance provider is financially stable, they will be able to fulfill their claims commitment. When an insurance company does not have financial stability, it may collapse and be unable to support you.
While this is rare, it does happen. You want to know your company is always secure and certainly don’t want the surprise of finding out your insurance provider cannot cover your losses when you make a claim.
Of course, this leads to the obvious question: How do you know your insurance company has financial strength? Unfortunately, it is not as simple as just purchasing a policy from the biggest industry names because even giant insurers go through periods of financial instability. Luckily, there are rating agencies that grade insurance companies in terms of their financial strength. Some of the major rating agencies are Fitch, Standard & Poor’s, AM Best, and Moody’s.
Price. Cost is important for any business, but the price of insurance is not the only factor. Instead, your health care business will be better served by looking for the policy that is the most affordable but also meets all your requirements.
Different insurers have different methods for determining the premium you will pay, although there are some industry standards. For insurance companies, pricing is all about determining how much risk your business presents. The key to finding the best deal that meets your company needs is to shop around. Speak to insurers, use online quote engines, and work with brokers to ensure you get the coverage you require to protect your business.
Customer service. While you want your insurance provider to be financially stable and priced competitively, it is also important that you can engage with the company. It is possible you will need to make a claim, change policy details, or update personal information. In these cases, you want to deal with a company that has good customer care. While most major carriers have good customer service records, some spend more time and effort on ensuring their customers are taken care of. This may seem unimportant, but dealing with welcoming, qualified, and thoughtful professionals will be vital during a claims process.
As a provider of health care services, you know intimately how important insurance is to the well-being and health of your patients. In the same vein, insurance is a crucial part of running a financially sound business. Business insurance can protect you from a variety of risks, from malpractice lawsuits to natural disasters. Having the right set of policies in place can keep your practice running no matter what unexpected events may occur.