Medical Malpractice Insurance
There are three main types of medical malpractice coverage, “Claims Made,” “Occurrence,” and “Tail.”
Claims Made Coverage
The vast majority of medical malpractice insurance policies are written on a Claims Made basis. What this means is that the policy will cover allegations of malpractice that occurred and were filed while your policy was in force. If you cancel your coverage for any reason, your protection ends on the day your policy expires regardless of when the alleged malpractice occurred.
Occurrence coverage applies to any event that occurred during the life of your malpractice policy, no matter when the claim is filed. Thus, an OB/GYN who is sued for a child’s birth injury five years after the birth would still be covered under the policy that was in force at the time the child was born even if it was no longer in effect.
Also known as an extended reporting endorsement, tail coverage applies to malpractice claims that occurred during the life of a Claims Made policy that are filed after that policy expires. Coverage is usually extended for one to 5 years or, in some cases, indefinitely. For instance, a 3-year tail will cover any claim filed within 3 years of the date your original policy expires. An indefinite tail period will cover any claim filed after the policy expires.
Tail coverage is often necessitated by a change in employment status. For example, a physician might need tail coverage if she:
- Leaves a group practice where coverage was provided by the group and terminates when she leaves
- Retires or sells a private practice
- Joins a medical group where she no longer needs individual coverage because coverage is provided by the group
Tip: Tail policies are typically offered by the incumbent insurer. However, you can often get better coverage at a more affordable price by purchasing Stand Alone Tail Coverage from an agent who will tailor the policy to meet your needs. Talk to your Carmoon Group representative to find out if a Stand Alone Tail policy is right for you.
Employment Practices Liability Insurance
Whether you’re primary care physician in a small independent practice or a partner in a large medical group, you almost certainly have some employees working for you. And when you are an employer, you are exposed to many different types of employment related lawsuits, such as breach of contract, discrimination, sexual harassment, wrongful termination or wrongful infliction of emotional distress.
Employment practices liability insurance protects your business assets in the event you are involved in an employment lawsuit, which are far more common than most physicians believe. In fact, employment lawsuits are the second most common type of claim filed against physicians, led only by malpractice claims. Small and medium sized practices, which often lack a dedicated human resources team, are particularly vulnerable and usually the least prepared financially to defend a suit when it occurs.
Employment practices liability insurance will pay your defense costs, including attorney’s fees and court costs, as well as financial settlements and judgements against your practice in the event you are sued for employment related claims. Covered areas generally include:
- Sexual harassment
- Wrongful termination
- Wage and hour disputes
- Negligent evaluation
- Violations of the Family Medical Leave Act
- Civil rights violations, such as discrimination based on race, gender, age, disability, marital status, status as a parent, sexual orientation or gender identity.
Tip: The best defense against employment-related lawsuits is strong risk-management plan, including documented procedures for hiring, firing, employee evaluations and the management of employee complaints. Ask your Carmoon Group representative about helping your practice develop a risk-mitigation strategy today.
Worker’s Compensation Insurance
The healthcare setting is fraught with risk, including risks to employees who may be injured on the job. Caring for patients exposes workers to numerous hazards, including musculoskeletal injuries, workplace violence, and exposure to blood borne viruses, such as hepatitis B and C and HIV. Although most workplace injuries are minor, many healthcare workers are seriously injured every day. A single needlestick from an HIV infected patient, for example, can lead to a lifelong illness for one of your employees.
How Worker’s Compensation Protects You
Worker’s compensation insurance protects you and your employees in several different ways. An employee who is injured or becomes ill due to an occupational exposure will receive a portion of his salary, as well as payment of his medical and rehabilitative costs for as long as he is unable to work. For an HIV exposed employee, this would include prophylactic antiretroviral therapy and, if necessary, the long term treatment for HIV or AIDS. The employee also would most likely be eligible for job retraining in the event he is unable to return to his previous role.
Worker’s compensation also protects you as employer. Suppose the above mentioned worker claims you failed to properly train him about universal precautions, and he subsequently develops HIV. He might sue you for hundreds of thousands of dollars in economic damages and pain and suffering, claiming your negligence led to his illness. Even if you prevailed in court, the cost of defending such a lawsuit would be enormous.
Fortunately, most Worker’s Compensation insurance coverage includes Employer Liability insurance, which will pay the cost of defending a lawsuit arising from a work related illness or injury, as well as any monetary settlement or award. It will also help defray the costs associated with a lawsuit brought by a survivor for pain and suffering or wrongful death.
General Liability Insurance
Unlike professional liability insurance, which provides coverage for allegations that you acted negligently in your professional capacity, general liability insurance protects your assets in the event you are liable in a bodily injury, property damage or medical expenses claim. It also applies to allegations of personal or advertising injury made against you or an employee.
What General Liability Insurance Covers
General liability insurance protects your assets in many types of third-party claims. Below is a brief summary of the types of issues you might encounter and a synopsis of the ways in which general liability insurance can keep your assets safe.
Bodily Injury and Medical Expense
Accidents happen everywhere, and a busy medical practice presents numerous hazards to employees and patients alike. A patient at your clinic might trip and fall over a stray electrical cord and break his arm, or someone stepping off a gurney could slip in a puddle of water on the floor and sprain his back. In both cases, the injured parties will want compensation for their medical expenses and, quite possibly, pain and suffering.
General liability insurance protects your assets in just these types of circumstances. It will pay the injured party’s medical and rehabilitation costs as well as your defense costs if you are sued. If the injury results in a lawsuit that is settled in the plaintiff’s favor, the insurance will also pay any monetary damages awarded by the court.
It may seem unlikely that a medical practice could be liable for damage to someone’s property, but whenever you deal with the public, these types of claims occur. Suppose, for example, a patient leaves her purse in your exam room and it disappears: She may demand that your practice reimburse her for the cost of the purse and any property it contained. Similarly, a patient might trip on a frayed rug in your entryway and break his $800 eyeglasses in the fall.
In either case, your general liability insurance would pay to replace or repair the patient’s lost or damaged property. In the rare event that you were sued for such an incident, it would pick up your legal costs as well.
Personal and Advertising Injury
Personal injury claims arise when a third party accuses you or an employee of defamation: that is, false or misleading statements that damage their reputation in some way. Suppose, for example, your office manager disparages another physician on social media, accusing him of performing unnecessary tests on his patients in order to pad his fees. The other physician could sue you for libel, and, if he can prove the allegations are unfounded, win. Even if he loses the case, you will still have to defend yourself in court.
Advertising injury occurs when you use the advertising materials, style of doing business or copyrighted materials of another business as your own. For example, if you create a logo for your practice that is virtually identical to the logo used by First Class Medical Group across the street, they could sue you for advertising injury in court. Similarly, if you misappropriate the content from First Medical’s website, you could be sued for copyright infringement or plagiarism.
Fortunately, your general liability coverage will pay your defense costs and any monetary damages in instances such as these. It will also pay to defend against allegations of false imprisonment or invasion of privacy.
Tip: As a matter of public policy, insurers are prohibited from paying punitive damages awarded by the court.
Cyber Liability Insurance
Cybercrime is one of the fastest growing threats to businesses worldwide, and healthcare providers are often easy prey. According to Health Data Management, a minimum of 110 million patient records were compromised in 2015, a number equal to about one-third of the population of the United States.
Your medical practice keeps a wealth of patient information, including personal data, billing information and a medical histories, on file. Even if your IT systems and security are excellent, this data is constantly under threat.
Cyber Liability Insurance will protect your assets and help rebuild your reputation if your practice is subject to a data breach. The Carmoon Group offers two types of coverage: First-Party Liability and Third-Party Liability. Here’s a rundown on what to expect from each one.
Cybercrime is becoming more and more sophisticated. Not only is patient information subject to data theft, but cyber thieves are now engaging in cyber extortion, holding entire systems hostage until a ransom is paid. In one 2014 incident, hackers inserted a virus into the database of Prime Healthcare Services, making it impossible for the system to access patient files. They then demanded $17,000 in bitcoin in exchange for returning access to Prime.
First party cyber liability insurance will help pay help defray the expense associated with many types of cybercrime. For example, it will pay:
- Cyber extortion expenses: If your practice is unable to restore your data after a cyberattack, Cyber Liability insurance will pay the ransom if there is no reasonable alternative.
- Customer notification: The Health Insurance Portability and Accountability Act requires you to notify patients and clients in writing of any data breach. Cyber liability insurance helps cover this expense.
- Credit-monitoring: After a cyberattack, patients and clients lose faith in your ability to protect their information. Providing credit monitoring services at no charge to them helps rebuild your reputation in their eyes, and Cyber Liability insurance will help with this expense. It may also assume the cost of helping to rebuild your reputation through advertising and public relations campaigns.
- HIPAA fines. In some cases, HIPAA requires that providers who are victims of a data breach pay a fine. Some Cyber Liability policies cover these fines to a certain extent.
If your practice stores data that belongs to another provider (for example, medical records or insurance information) and your system is hacked, the other provider could sue you for negligence. These types of lawsuits are often lengthy, complex and expensive to defend. Third Party Cyber Liability Insurance will help defray those costs and pay any monetary judgements that ensue.
Tip-HIPAA requires that healthcare providers maintain certain administrative, technological and physical security standards to protect patient data. Failure to comply with these and other HIPAA regulations can result in stiff fines. Speak to your Carmoon Group agent about HIPAA compliance, or refer to the HIPAA website for additional guidance on the law.
Advertising injury involves using a competitor’s advertising ideas, “style of doing business” or copyrighted materials as your own. So, if another clinic in