Questions To Ask That “Affordable Malpractice Coverage Carrier”
I love this pithy little quote by James Goldsmith: “If you pay peanuts, you get monkeys.”. Basically, you get what you get.
Shopping for malpractice/liability coverage seems to be relatively easy process, according to the professionals we ask. We easily defer to and blindly trust our professional organizations to tell us what the solution is. Surely these two entities should know what the best solution is, right?
How many times have you seen on this genuine and seemingly innocent question posted on various discussion boards? It goes something like this:
“I am just getting started. What malpractice insurance is best? What insurance should I purchase?”
We all love this question (…yes, I am being sarcastic).
Typically, the replies are:
“I got a discount rate from my association for XYZ.”
“ABC Insurance Company, and I think they are great! They were really, really nice!”
You are told that you have to purchase malpractice coverage in order to acquire that infamous liability face sheet. Then, you are good! You are now “in business” and ready to conquer the private practice world! And, depending on whether your work status is a part-time intern or a full-time/part-time clinician, you can purchase the annual policy, which is fairly inexpensive.
So…you purchase it.
You buy the usual $1million/$3million coverage, or you upgrade to the $1million/$5million. You might think that the upgraded policy is even more better (yes, I’m aware of the grammatical error).
So what does that liability face sheet that you receive via email, stating that you are “covered”, actually cover?
Many believe that it covers court venues of all kinds such as lawsuits, Board complaints, or anything else that involves troublesome situations. And, as a result, I have found through my speaking engagements that most people are happily practicing under the illusion that there is nothing else to worry about.
Here are my Top 1-2-3 Recommendations When Purchasing/Reviewing Malpractice Coverage:
1. Ask the Agent the Following Questions (require your agent give examples):
What does the policy actually cover?
What are the exclusions?
What constitutes a “professional incidence”?
If I get sued, what provisions will the policy actually cover?
What is the process for acquiring an attorney to represent me if I get a Board complaint?
What are the coverage parameters with a HIPAA violation complaint? Cyber violation breach?
Can I pick my own attorney?
Will expenses be reimbursed during the event, or is reimbursement contingent upon being reviewed by the policy reviewer and legal team?
Do I need to list everyone that I office with even though I am just renting a 10×10 room for two days?
2. Read the Policy Before You Sign
Once you get the answers from your agent, take time to actually read your policy. Most likely, your policy will be written in 3 sections: what is covered, what is excluded, and definition of
Read to Understand:
What is covered is “covered” (this will be listed in the “covered” section, which is all you probably need to know).
Learn what constitutes a professional incidence, as per the policy’s definition.
Understand the definition of negligence, and why the policy forbids coverage when there is either negligence or gross-negligence involved in an incident.
3. If the agent cannot explain to you what exactly is covered, you
have two choices:
You sign and purchase knowing what the rules of engagement are with an affordable policy.
You consider buying additional coverage from another agent who can help fill in the coverage gaps.
Talk with several types of insurance agents. Explain to the agent about you, your practice setup, and help them to know everything about your new practice (this includes LLC, Corp, or Sole Proprietorship). Have the agent suggest types of umbrella coverages, rental space coverages, and slip and fall coverages for your office. Setting those up can help you and you growing practice. Ask about purchasing some additional coverage so you can pick your own legal representation should Things Go Bump In The Night.
I hope this was helpful! Let me know. Drop me an email with any questions
or concerns you might have – [email protected].