Insuring a Medical Lab is More Affordable Than You Might Think

January 30, 2020
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Liability Insurance for Medical Laboratories

Insuring a medical lab is more affordable than you might think, and importantly, the policy can be written to include a general endorsement, insuring the lab director whether they are a PhD or a medical doctor.

Insuring the lab director is only a small part of the liability solution. If you carry a separate lab director policy, you will have to deal with the tail insurance if the lab director cancels or decides to discontinue the contract. It's important that the policy includes in the definitions of insurance coverage for the medical director or lab director. These policies also need to cover non-medical owners executives and non-medical doctor staff working on behalf.

The Diagnostic Laboratory Professional Liability Policy premiums and the liability policy contract are developed by considering the services and the personnel represented. The premium calculus considers the revenue, the estimated number of slides / specimens and the state (or states) in which you contract to perform the lab analysis.

These policies can be issued as part of the process of becoming CLIA certified.

Coverage can include Medical Directors for their administrative duties and for their clinical reads and slide or specimen analysis. Because these policies are written with non-specific endorsements, they can save thousands of dollars in tail payments, which would be triggered at the time the medical director, lab director or even a pathologist providing services on behalf of the lab decide to cancel. The nice aspect about an entity/organization-level policy is that it includes that “non specific” clause covering the directors in general, rather than a specific person, giving you some flexibility.

Our agency has 10 licensed professional liability insurance brokers we contract with. They are specialty A-rated carriers that understand this market and provide competitive quotes and appropriate policies.

We can work for an approved rate quickly if you’re in a rush.

For new labs or labs in their first few years of operation, it is possible to find a minimum premium of approximately $3,500 to 5,000.

There are several Medical Malpractice Insurance carriers with specialty policies to cover this risk. One company, underwritten by the insurance giant Lloyds of London, provides broad insurance coverage for labs that can extend to the following:

• Medical Testing Facilities
• Imaging Facilities
• Individual Technicians
• Doctors
• Laboratory Technicians
• Clinical Laboratory Technicians
• Medical Technicians
• Medical Lab Technicians

The broad definitions include insurance for those mentioned in the above roles working on behalf.

Target organizations include:

• Pathology Laboratories
• Clinical Microbiology Laboratories
• Genetic Laboratories
• Clinical Biochemistry Laboratories
• Hematology Laboratories
• Drug and Alcohol Screening Laboratories
• Mobile drug/alcohol testing

When you're completing an application for medical laboratory liability insurance, always project your annual premiums to consider the number of consultations or reads, the type of specimens, images, or other DNA RNA analysis's performed by the lab.

It is important to indicate who, what and where: who is doing the testing, what are they testing and where will the specimens come from (as well as where the lab is located, of course).

If you have any questions, please don't hesitate to contact us. We're always here to help with any insurance questions and make this often complicated subject easy for you.