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After years of medical school and practicums spent under the tutelage of mentor physicians, young but certified medical professionals are ready to open their own practices. It’s the opportunity to spread your wings, be your own boss, and earn a substantial living.
You shouldn’t launch a medical practice without certain protections, however. You’ll be exposed to a variety of liabilities and potential pitfalls almost daily. You might be the best doctor in the state, but you’ll still be a human who will make mistakes. A medical malpractice claim could put you out of business pronto.
“In any workplace environment, accidents and injuries can occur,” says an article from POMS & Associates, a risk management organization. “This is certainly true within the healthcare area, but it becomes an even larger concern because you’re dealing with patient health. In some cases, you may even be dealing with life-or-death decisions.
“In any of these circumstances, prescribing the wrong medication, improperly reading a chart or results from a test, and making human errors during a procedure can cost your practice dearly,” the article continues. “When a mistake occurs, the result can be a lawsuit that may end up bankrupting your practice and ruining your professional reputation within the medical community.”
Insurance is the best way to protect your business. Medical practices need a variety of policies to cover them in case of a disaster. You probably don’t care to be caught unawares without the following coverage.
1. Professional Liability Insurance
More commonly known as malpractice insurance, professional liability insurance protects you in the event that a patient should sue you with a claim of negligence or an improperly performed procedure. Of course you would never injure a patient intentionally, but mistakes can and probably will happen, and you and everyone else in your clinic can’t continue to work without this coverage.
When you’re starting out, you probably won’t have the cash to cover such claims, which can amount to hundreds of thousands or even millions of dollars, even if you settle. Insurance will cover the financial aspects of this hardship.
Your options for coverage depend on your needs. You’ll likely want a policy that may cover everything from accidents on your premises to procedural errors.
2. Property Insurance
General insurance policies that cover your property are essential for running a physical business of any kind. In the event of a plumbing disaster, accident, or other property damage, your insurance will cover the cost to repair the damage.
“Whether a business owns or leases its space, property insurance is a must,” explains John Boitnott of Entrepreneur. “This insurance covers equipment, signage, inventory and furniture in the event of a fire, storm or theft.”
Boitnott cautions that you might need specific policies to cover various facets of property damage. “Mass-destruction events like floods and earthquakes are generally not covered under standard property insurance policies,” Boitnott explains. “If your area is prone to these issues, check with your insurer to price a separate policy.”
3. Business Interruption Insurance
In a perfect world, your medical practice would be able to operate day to day without issues. However, you can’t control everything, especially natural disasters and unforeseen property damage.
When these occur, your business may cease operation until the damages can be repaired. While that is going on, you’ll lose money each day your business is closed, unless you have business interruption insurance (BII). This covers income lost due to accidents and can help you make payroll, cover business expenses, and ultimately stay in business.
Property insurance simply won’t be enough to cover you in this case. “This coverage is different from property insurance in that it covers incomes lost due to a disaster-related closing of a business or due to the need for structural rebuilding of the practice,” explains an article from the American Academy of Family Physicians Insurance Program.
“However, BII can also be combined with a property insurance policy — this package is known as a Business Owner’s Policy.” You might think about requesting a package deal to get a better price.
4. Worker’s Compensation Insurance
You probably won’t be the only employee in the office. If that’s the case, you’ll need insurance to cover potential worker injuries.
Employees might cut themselves, trip over a cord, or suffer some other accident on the job. Work-related injuries such as carpal tunnel or back pain also qualify.
In case that should happen, you need a policy to cover the resulting medical damages. Most workers compensation policies cover employee medical expenses, a portion of their lost wages, and changes in lifestyle.
This coverage is vital not only for the health and welfare of your employees, but for the financial peace of mind for your staff. Without this insurance, you might not have enough to cover the medical bills and lost wages, and the injured employee might then have grounds to sue you.
Very few beginning medical practices can recover from such a lawsuit. So consider these types of insurance as your prescription for a successful practice. You can’t grow a healthy and successful business without them.
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