Outpatient Centers Medical Marijuana liability Insurance
From an underwriting standpoint, surgery centers, wellness centers, outpatient facilities, urgent care centers, and aesthetic regenerative spas (also known as medi-spas) all fall into the same category of healthcare liability insurance.
Across the country, we are also seeing growing acceptance and an ever-evolving market for medical marijuana, CBD products, cannabis dispensaries, and physicians certifying patients for medicinal use. This has led insurance carriers to study, edit, and adjust their policies faster than ever before.
One of the most common questions about Medical Malpractice Professional Insurance that we receive here at the Doctors Insurance Agency involves how to best insure centers focusing on the use of marijuana for medical purposes.
Let’s compare aspects of insuring this type of center versus other more established types.
Surgery Centers and Urgent Care Centers are similar in that it is almost always more affordable to purchase an entity-level policy that includes coverage for everyone working on behalf of the company, including the medical doctors. These scheduled policies allow for easy onboarding and cancellation of physicians without expensive additional premiums or tail premiums triggered upon cancellation.
Cannabis certification offices and dispensaries are somewhat different because the insurance field has not yet evolved in the same way. It can be less expensive to provide a single physician policy covering the certification process and a separate policy for the dispensary facility, which would include both general and product liability.
Medi-spas fall somewhere in between. Many medi-spas prefer to keep an arm’s length of distance between the estheticians and the spa itself. However, in our experience at the Doctors Insurance Agency, it is more efficient and provides better liability insurance to purchase the facility policy at the organizational level, similar to what is done with urgent care and surgery centers.
One of the challenges that medi-spa facilities face is that they often start with just one doctor, nurse practitioner, or esthetician. These workers carry their own separate insurance coverage since the facility more or less only provides a venue for the medical professional to do procedures.
As the outpatient center or medi-spa gains experience and credentials and passes certifications, it sometimes attracts investors so that they can expand the business by adding treatment rooms or operating centers. They often begin dispensing skin products and acquiring more square footage for additional chairs and rooms for treatments.
The underwriting for these policies is based on macro insurance pricing variables such as revenue, number of consultations, and the types of treatments. These factors determine the premium and the policy endorsements. Generally, all of these centers are underwritten by carriers that can also include a general liability policy, and most of them will offer policies that include the medical doctors and all professional providers working on their behalf.
Surgery centers are an exception to this. Most of the physicians and surgeons using the facilities have their own individual professional liability policies that cover them for all surgical procedures performed at the center. Therefore, the surgery center policies are written on more of a standalone basis.
These policies are less expensive than you might imagine. The minimum premium oftentimes starts at $5000 per year and will frequently be less than $15,000, regardless of how big the facility becomes.
Startup facilities will have to go through the exercise of projecting the number of procedures as well as annual revenue. This market is vibrant, filled with financially strong, committed insurance carriers with years of experience in the healthcare liability niche.
Many of them have third-party companies that specialize in risk management and have advanced networks of established, proven medical defense attorneys who have successfully defended urgent care centers, surgery centers, medi-spas and even wellness, cannabis, and other integrative facilities.
The Doctors Insurance Agency can provide expertise in these specialized areas, finding the right coverage for your business without leaving the medical professionals to find their own coverage