Medical Office Insurance Guide

Some believe that physicians and other medical professionals only need malpractice coverage. However, medical practices now carry other extensive risks in addition to a patient filing a lawsuit against their doctor. In this post, we’ll guide you through the most common risks medical offices face as well as some insight into how medical office insurance can offer effective risk management.

What Risks Do Medical Professionals Face?

Popular headlines make it evident that high-dollar claims against medical professionals have skyrocketed in the past 20 years. But it’s the cost per claim that makes most healthcare workers balk. The average cost of a claim against a physician is about $100K. What’s more, is that 7 out of every 100 doctors will face this particular music.

But that’s just for starters. As mentioned, healthcare is more complex today than ever before. This scenario causes far more risks for medical practices, such as:

Data Breach 

Cybersecurity is a massive concern for most organizations trying to safeguard patient information. Although patient and other identifying information is typically protected by the Health Insurance and Portability and Accountability Act (HIPAA), breaches still occur. And the fires they cause can be incredibly costly to put out. 

It’s no surprise that most data breaches happen due to hacking, phishing, or device theft. With cybercriminals becoming more and more sophisticated, this nefarious trend shows no signs of retreat. What this means for medical offices is that robust cybersecurity programs must be active, and an adequate insurance safety net is non-negotiable. 

Real-Life Claim  

After a phishing attack on UnityPoint’s email system, data of 1.4 million patients was breached. Not only did this cyberattack compromise 16,000 patient records, but it all started with a seemingly innocent email appearing to be sent from a company executive. For the full story, see: Phishing Attack Exposes PHI of 1.4M UnityPoint Health Patients

Medical Malpractice 

As in any industry, dealing with unhappy clients is typically unavoidable. In the medical field, patients can file a claim alleging a healthcare professional’s negligent act caused injury to them. As mentioned, up to 7% of physicians will face this type of medical malpractice lawsuit. 

Besides the immense defense costs, settlements can do a hefty amount of financial damage, as well. Although the ding to your reputation is unfortunate, it’s the legal price tag that tends to cause the most harm.  

Real-Life Claim

When patient Lawrence Jackson went to Providence St. Vincent Medical Center complaining of various symptoms, staff sent him home after realizing he wouldn’t fit in the MRI machine. After a turn of events, Jackson now suffers permanent paraplegia and has $1M in medical bills. However, this case is still in litigation. For the full story, see: Jaw-dropping, eye-popping malpractice suits in 2018

Property Damage 

If an event, such as an outage or another natural disaster, causes damage to your business property, it could close your facility temporarily. Also, consider property contents like computers, office equipment, filing, and medical machinery, as well. Medical offices depend on these items to conduct business. When disaster strikes, it’s crucial to have a way to make quick repairs and rebound from the devastating impact. 

Real-Life Claim

Four months after Hurricane Michael blasted Bay County, dozens of medical offices have started to reopen. Although a full recovery is far from complete, the medical community is well on its way to reclaiming what was lost. For the full story, see: Bay County medical industry better but still recovering from Hurricane Michael

Employee Lawsuits

As intimidating as patient lawsuits can seem, employee lawsuits often pose a more significant threat. Employees can feel shorted by a medical practice for various reasons. As a result, there has been an uptick in the amount of employee-related lawsuits impacting healthcare organizations. Many times, employees cast blame because of outdated policies or ill-defined procedures, which can frequently serve as legal landmines. 

Real-Life Claim

A group of former employees has accused Atrium Health of falsely claiming to be a part of the government. The federal class-action lawsuit states that the hospital chain has cheated thousands of employees over retirement and health benefits. For the full story, see: Atrium Health cheated employees over retirement, health benefits, lawsuit claims

What Is Medical Office Insurance? 

Medical office insurance is also known as malpractice insurance or medical practice liability insurance. As mentioned, medical offices carry plenty of risks—employee crime, cybercrime, property damage, patient lawsuits, etc. In short, medical office insurance helps to mitigate that risk. 

Should you experience a professional loss, your medical office insurance policy will work to help cover legal fees as well as the costs associated with restoration. 

Keep in mind that medical office insurance isn’t merely a one size fits all product. Instead, it should be a comprehensive package with customizable policies that meet your specific needs, which may include: 

• General liability (GL) insurance: If your business causes property damage or injury to a third party, GL insurance helps to cover the cost of claims filed against you.

• Errors & Omission (E&O) insurance: Also known as professional liability insurance, E&O is basically “malpractice” insurance. This policy works to safeguard the professional services you provide. If a third party files a lawsuit against you after suffering a financial loss, claiming some perceived failure in your service, this particular policy can defend against the lawsuit.

• Business property insurance: As one of the most popular policies, it’s essential for companies that own physical property, such as buildings, computers, equipment, furniture, etc. If damage occurs to your business property, this policy can help you replace or repair the property. 

• Commercial auto insurance: This policy protects vehicles that are used for business purposes. Whether it’s a collision, vandalism, or theft, commercial auto insurance can cover physical damage or loss as well as bodily injury.

• Umbrella insurance: Since all commercial policies have coverage limits, umbrella insurance increases liability limits. It can cover one policy or several to supplement your chief policy limits. 

• Workers’ compensation insurance: Often state-required, a workers’ comp policy covers work-related medical costs, recovery, and income if the employee sues your company for an injury that occurred while on the job. 

• Employee practices liability (EPL) insurance: This policy covers companies who find themselves in the middle of an employment dispute. Even when you try to manage people properly, some may still file a suit because of perceived discrimination, retaliation, or wrongful termination.

• Crime insurance: Crime insurance reimburses businesses for stolen money, securities, and other tangible property.

• Cyber liability insurance: With sophisticated cyberattacks on the rise, this policy covers costs regarding liability to others and your losses, as well. 

Who Need It?

It’s a common misperception that only physicians need medical office insurance, but plenty of organizations and professionals carry the risks mentioned above, such as:

• Chiropractors
• Healthcare facilities
• Hospitals
• Massage therapists
• Health-centered foundations
• Acupuncturists
• Medical practices
• Dentists
• Managed care organizations
• Healthcare systems
• Optometrists
• Managed care organizations
• Physical therapists

Although this list isn’t exhaustive, it does include some of the most common medical professions needing medical office insurance. However, it’s essential to secure a customized insurance plan so that it protects your particular business adequately.  

How Much Does It Cost?

Like most insurance policies, the cost of your premium will be based on the details of your business. Some elements to consider are the type of medical practice, the size of the patient base, geographic location, specific risks, etc. 

Accurately estimating premiums for many medical practices is impossible in one post, though a quote can offer you more specific insight. 

It can seem like a confusing process to understand what coverages your medical office needs. Founder Shield specializes in knowing the risks your medical practice faces to make sure you have adequate protection.