Today, many physicians are moving toward the Direct Primary Care business model. As they do, they are leaving their employers who have until now handled many of their insurance needs.
If you’re making the transition from fee-for-service care, you can forget about dealing with the hassles of your patients’ health insurance. However, while direct primary care may solve many of your insurance billing issues, you still have to explore the types of insurance that will best protect you and your business.
Do you have the coverage you need? If you have an office or small clinic, are you adequately protected against liability, property damage, or an unavoidable interruption in the business?
Because roughly one in three small businesses may have an insurance claim in a given year, we decided to look at the range of business-related insurance most commonly carried to protect you, your employees and the patients and visitors coming to your office.
Having the appropriate coverage could be the difference between the financial security of you and your family and losing everything you’ve worked for all these years.
Protect Your Income
You likely want to protect yourself and your family in case something prevents you from working—whether permanently or for several weeks or months.
It’s advisable to buy a disability insurance policy that uses a broad definition of disability. You want own-occupation, specialty-specific coverage with no limitations. You will want a long-term benefit pay out to at least age 65.
There are many strategies to consider when buying life insurance, and your objectives will determine whether you choose term or whole life. A term-life policy is for a specified period and only has value if you die during that term. Whole life insurance, which is more costly, builds value and protect you for your entire life.
If you’re in a medical building as part of your direct primary care participation, you may want a term-life policy, which will enable your family to pay off any loans or mortgages should you die. You can also assign benefits for loan collateral.
Protect Your Business
Below are some insurance policies you might want to consider to protect your business:
As a physician, you may be sued for malpractice at some point. One big claim could wipe out your savings. Thus, virtually every healthcare provider carries malpractice insurance. In many states, it’s mandatory.
When you are ready to buy malpractice insurance, do your homework. Compare prices, and check for reviews and complaints. Your field of practice or area of specialization will usually drive the cost of your insurance, which could range from $4,000 or $5,000 annually to $15,000 or more. Because this is such a significant investment, talk with several agents, and get more than one quote before making your final decision.
General Liability
General liability insurance safeguards you against the high cost of lawsuits filed by patients, delivery personnel and any visitors on your premises for personal injuries, such as slipping and falling, or property loss or damage. If you own your building, you’ll require general liability. If you lease, check with the building manager to determine your level of responsibility and how much coverage you’ll need.
This insurance also covers you for lawsuits that claim personal injuries caused by libel, slander or copyright infringement in your marketing materials.
Property Insurance
If you own your building, you’ll also need to protect it as well as your professional property, including computers, medical equipment and office furnishings. If you rent or lease, you can limit your policy to the contents of your space.
Business Owner’s Policy
A business owner’s policy is a bundle that includes both general liability and property insurance. Because premiums tend to be lower than separate policies, they are often popular with small and medium-sized businesses.
Cyber Liability Insurance
Under HIPAA, you are responsible for securing any protected health information. Despite all the care you take, data breaches and cyberattacks can still happen. If they do, you’ll be glad you have cyber liability insurance to help pay for data recovery and associated costs, including public relations, legal fees and liability. As telehealth and telemedicine grow, such insurance becomes increasingly important.
Workers’ Compensation
In all states except Texas, workers’ comp is required for every business with one or more employees. It provides employee benefits for work-related injury and illness, including those resulting from employee or employer carelessness.
Business Interruption Insurance
This coverage provides financial help when an unavoidable event or catastrophe, such as a fire, flood or earthquake, forces your clinic or medical office to close temporarily. It’s typically not sold separately but rather as a rider to a property or casualty policy and can cover lost revenue and even temporary relocation costs. Also, if you have a critical supply chain for medical supplies or equipment, you may want to explore a Contingent Business Interruption rider that extends coverage to property losses at a supplier’s location.
Errors and Omissions Insurance
Errors and omissions insurance is another form of liability protection for your practice against any claims not covered under malpractice. It generally includes any errors and omissions associated with billing operations, management services, lab work, managed care-related activities and more.
Moving to a direct primary care business model can be an exciting change. But when you make the transition, remember you need to protect your patients, your employees, your practice and, of course, yourself and your family. The right choices will help to give you peace of mind and to provide a secure future.
