According to the Journal of the American Medical Association nearly $3 billion dollars is spent on medical malpractice suits every year, averaging one payout every 43 minutes. As a physician, you have many things to worry about other than medical malpractice suits; but with a $3 billion dollar a year reality, medical malpractice can’t be ignored.
Medical Malpractice Insurance helps protect physicians and other licensed health professionals from wrongful practice suits resulting in bodily injury. Today’s blog takes an in-depth look at the 3 Things to Know About Medical Malpractice Insurance.
1. Claims-Made Policy vs Occurrence-Based Policy
There are two types of liability insurance to choose from: claims-made vs occurrence-based. Deciding which policy type is best for you is determined on a number of personal factors like specific daily functions – for example, a brain surgeon will need different coverage than a dentist – and your current financial situation as most liability insurances are not cheap.
Both insurance types are based on time frame of incident; Claims-made policies cover incidents that happen during the policy term as long as the claim is filed during the policy term. An occurrence-based policy covers claims during the term of the policy regardless of when the claim is made. For example, if a patient lodges a complaint regarding a hospital stay 5 years ago – outside of a doctors current policy term – under claims-made that incident would not be covered. Alternately, under occurrence-based, that claim would be covered. Because of the vast difference in coverage, there is also a vast difference in cost; a claim-made policy is much less than an occurrence-based policy.
2. Consider How You Form an Entity
For physicians looking to start their own practice or for entities merging with another, it’s important to consider the different legal protections afforded under various entity formations. Entity’s can be created as sole proprietorships, limited liability company (LLC), limited liability partnerships (LLP), and professional corporations, all of which can either be formed as C or S corporations. Knowing which formation to use when can be extremely challenging, and it’s important to note that all types of entity formation are liable to personal risk to some degree.
Depending on how your entity is formed will depend on the level of medical malpractice insurance that best fits your situation. As your financial team, our advisors at IMAFS can provide advice on this matter. For more detailed information be sure to consult with your lawyer.
3. Property & General Liability Coverage
Physicians and other medical professionals will occasionally purchase additional coverage in the form of property and general liability coverage. However, this policy is not universally recommended for all physicians like medical malpractice insurance is; its general usage is for more specific situations like if a physician owns his or her own practice or to cover general business loss due to structural damage.
Hospitals and other medical facilities will typically have property and general liability coverage to protect physical buildings of an organization. This policy type typically covers equipment and supplies from theft, natural disasters, building maintenance issues, or any time lost from ‘business interruptions’. This type of insurance also covers potential injuries to people while they are on your property. Less well-known, property and general liability coverage also covers claims of defamation, slander, and/or libel. These last points of coverage can be persuasive deciding factor why a medical professional might consider purchasing property and general liability coverage.
For more information or to answer specific questions on your individual financial needs, please contact your financial advisor to set up a portfolio review. For more financial information and advice, call: (208) 504-1736 or email email@example.com. We look forward to continuing to assist you on your financial journey.
Idaho Medical Association Financial Services is a financial and wealth management firm specializing in personalized financial guidance to accredited investors in the medical field. Areas of speciality range from investment planning and retirement analysis to in-depth services such as tax analysis and strategies, insurance and estate planning and financial planning. For a free financial consultation, please call: (208) 504-1736 or email firstname.lastname@example.org.