How to Properly Insure a Startup Healthcare Practice
Medical groups, medical spas, surgery centers, and diagnostic labs need business liability insurance.
People want answers to many questions about liability insurance and often say, “I need to know how to properly insure my startup healthcare practice.” The short answer to this need is:
You start with one simple policy.
However, the confusing thing about this answer is that one simple policy, a Medical Professional Liability policy, has many synonyms. And within that policy, there are three different types of limits protecting the organization and three kinds of professional liability insurance.
The limits are:
- Professional (medical malpractice)
- General Liability (protecting the entity against premises-property and some products claims
- Network Security Cyber limits
And the three types of insurance available are:
- an occurrence policy
- a claims-made policy
- a hybrid claims-made policy with an occurrence endorsement
Why am I asking if this policy is an occurrence?
Years of representing medical professional liability insurance companies have led me to conclude that claims-made policies are better than occurrence policies.
Both liability insurance policies protect you in the event of an allegation — a phone call, a letter, an email demanding money records or an appearance.
According to Insureon, the policies have differences related to continuity:
Claims-Made:
The claims-made form of policy provides coverage for any claim where the claim is made after a "retroactive date" (a separate date stated on the claims-made policy) and the expiration date of the policy. A claims-made policy refers to an insurance policy that provides coverage when a claim is made against it, regardless of when the claim’s event occurred. A claims-made policy is a popular option for when there is a delay between an event date and when claimants file their claims.
Occurrence:
An occurrence-based policy covers losses that happen during the time you have the policy, regardless of when you file a claim. It is designed to protect you against long-tail events — incidents that could cause injury or damage years after they occur.
Much of this can be confusing, and talking to a specialist can help. The Doctors Insurance Agency spends the necessary time to help you find the correct policy type with the right limits.
First and foremost, a startup healthcare organization needs the medical professional malpractice insurance limit to comply with pay or contracts and properly protect the organization, the owners, and those making the decisions on their behalf.
A hybrid claims-made occurrence policy allows you to recruit medical professionals, health care technicians, and wellness counselors, confidently offering them a policy that covers them long into the future — even after they have canceled — at no additional cost to them.
A medical professional liability policy with sub-limits that offers protection for cyber breach extortion and network failure is also essential.
These policies make up the foundation of a business liability policy covering a health care organization