INSURANCE COVERAGE OPTIONS FOR PERSONAL POLICIES
Personal Policies
Professional Liability (Malpractice)
Professional liability insurance is designed to defend and indemnify a doctor from allegations of treatment errors resulting in harm to a patient. In addition to the threat of a lawsuit, professional liability will also defend you if a patient makes a clinical complaint to the dental or medical board. Choosing professional liability coverage is serious business. Your reputation and even your ability to continue to practice may depend on that choice. We have options and we’re here to help.
Disability Insurance
Your ability to earn is your most valuable asset.
I’m going to offer you two jobs. Job one pays $150,000 a year and you’ll keep earning that salary as long as you can work. Job two pays $146,000 a year and you’ll keep earning that salary whether you can work or not. Which one do you want? If you chose job two, you’re not alone. This is the easiest way I know to explain the importance and relatively low cost of adequate disability coverage.
It’s also important to understand that disability coverage is most easily secured and least expensive when you’re young and healthy. Once you’ve developed health problems it’s likely too late.
There are several very good disability companies to consider but comparing them can be difficult. It can even be difficult to compare the options offered by a single company. With disability insurance, it’s definitely not one size fits all and there is nothing worse than finding out you’ve got the wrong coverage after you’ve become hurt or sick. We can help you understand your options, all your options.
Term Life Insurance
Death and life insurance can be an uncomfortable subject. Take the emotion out of life insurance though and it’s nothing more than an extremely efficient financial tool. It can single-handedly create an estate to protect your family if you die. It can be used to collateralize a loan or fund a buy-sell agreement. It can even be used as part of your retirement plan or to provide long term care in your old age. Most of the life insurance we sell is Term Life insurance. An inexpensive form of life insurance bought for a specific period of time or “term” to get your dependents from point A to B even if you’re no longer there. For those with a specific long term or permanent need, we offer Whole Life insurance, a form of life insurance designed to stay in force until death at any age and that also may provide living benefits along the way. Whatever your situation, we can help you find the life insurance to address it.
Personal Home & Auto Insurance
We’ve been conditioned by advertising to believe that Home and Auto insurance is all about price. We’re told that all home and auto insurance policies are created equally. It’s just not true.
At some point, many of us accumulate estates that merit a greater sense of care when it comes to securing insurance coverage. There are “white glove” insurance companies for those who have amassed all the trappings of success. These companies provide more personalized service, broader coverage and make claims much easier to tolerate. Often it doesn’t even cost more to insure with one of these companies. They are looking for successful clients like you and when they find you, they offer their very best pricing. We work with those companies because we work for successful clients like you.
It’s important to note that basic homeowners policies do not cover the perils of flood and earthquake. Coverage for these risks must be purchased separately.
Personal Umbrella Policy
The quickest way to lose everything you have is to be held personally and financially responsible for an injury or death caused by you, a member of your immediate family or connected to a property you own. Unlike your malpractice exposure, there is no tort limit to mitigate to loss. That’s why it’s so important to carry a personal umbrella policy.
A Personal Umbrella Policy extends a blanket excess limit of liability coverage that rides above the underlying limits of liability coverage connected to your home, auto, boat, motorcycle, vacation property, etc. policies. That excess layer of liability coverage will pay claims that exceed the limits of coverage on those underlying policies. Personal umbrella policies are inexpensive and we have access to some of the best umbrella products on the market.
Personal umbrella coverage can be purchased in increments of $1 million dollars to whatever limit is sufficient. Anyone who has amassed a personal estate of any size at all does not have enough coverage on their basic personal insurance policies to protect that estate. A personal umbrella is essential.
Individual/Family Health Coverage
The Affordable Care Act (ACA) has completely changed the way that individuals and families purchase health insurance. The ACA has provided subsidies to those whose earnings fall below a certain threshold but unfortunately the cost of health insurance has also risen sharply due to the underwriting constraints contained in the Act. So, most people looking for individual or family coverage have found higher prices with higher deductible and fewer coverage options. For example, under ACA, PPO coverage options have become scarce. Weighing your health insurance options alone can be difficult. Most carriers offer both “on exchange” (plans eligible for subsidies) and “off exchange”. There is no real reason to purchase an “on exchange” plan unless you think you’ll qualify for a subsidy. The price of coverage is the same if you purchase through an agent, the carrier website or healthcare.gov. We’re here to help you navigate this ever changing process (at no additional cost to you).
Flood Insurance
Insuring your home for the risk of flood requires a specific and separate policy. A standard homeowners policy will not cover your home for flood damage. Flood Insurance is completely underwritten (backed) by the federal government through the National Flood Insurance Program (NFIP) but is purchased through the same sources that you buy you homeowners insurance through, insurance agencies like ours.
Flood coverage is a somewhat limited and basic coverage but if your home is located where the risk of flood is a possibility, you shouldn’t be without it. Please note that a flood is specifically defined as rising water due to the overflow of lakes, creeks and other waterways.
Earthquake Insurance
A basic homeowners policy does not cover the risk of earthquake. If your house is located in a seismically active area, securing earthquake is imperative. Some companies will add earthquake coverage to the homeowners policy for an additional premium. You can also buy Earthquake Insurance as a separate policy.
INSURANCE COVERAGE OPTIONS FOR BUSINESS POLICIES
Business Policies
Professional Liability (Malpractice)
Professional liability insurance is designed to defend and indemnify a doctor from allegations of treatment errors resulting in harm to a patient. In addition to the threat of a lawsuit, professional liability will also defend you if a patient makes a clinical complaint to the dental or medical board. Choosing professional liability coverage is serious business. Your reputation and even your ability to continue to practice may depend on that choice. We have options and we’re here to help.
Entity (Corp) Professional Liability (Malpractice)
Individual professional liability policies are designed to defend and indemnify you individually for a healthcare liability (malpractice) claims made against you. If you own a practice, it’s important to make sure the practice entity is protected as well. In many cases, the practice entity can be named as an additional insured on your individual policy. The entity, when named as an additional insured is only insured with regard to your individual actions. This means that the entity is afforded indemnity and defense coverage only when you as an individual are also named in the complaint.
If you employ associate dentists or use contractor dentists you change the risk profile of the practice. Your practice entity is now exposed to and could be held responsible for the actions of these associated dentists. We refer to this risk as vicarious liability and your individual professional liability policy does not provide your owned practice with any vicarious liability coverage.
Every insurance company we represent offers a solution to the vicarious liability coverage issue. All offer the option in one form or another of securing specific vicarious liability coverage in the name of the practice entity. The cost and underwriting criteria will vary by company. Handled correctly, the practice entity is protected with regard to the actions of your associate dentists. The practice entity will also be protected even when the entity is the only defendant named in the complaint.
Group Professional Liability (Malpractice)
More and more, the group practice setting is being preferred to the traditional solo doctor practice. Just as the group practice setting differs from the solo practice setting, the risk profile of the group practice differs from that of the solo practice. As a practice grows, coordinating the individual professional liability (PL) coverage of the associate doctors can be more difficult. In addition, the larger the practice becomes, the more likely the practice itself will become the target of a malpractice claim. We refer to this as Vicarious Liability and even if the exposure is greater for a large practice, it should be addressed the minute a practice goes from one doctor to two.
At some point it makes sense for the practice owner to consider a group PL policy to serve as the coverage for every doctor in the practice as well as the practice itself. This is a big step and will require some effort on the part of the practice owner. Still, the advantages will be worth it.
- First: The practice entity itself will be insured (defended and indemnified) if named in a lawsuit. That’s likely not going to be the case if associate doctors purchase their own Professional Liability Policies. Those policies won’t insure the practice you own.
- Second: You are in control of the policy that insures you, your practice and your associates. You’ll never have to worry that an associate has let their policy lapse without your knowledge. Just because you collected an insurance certificate from the associate when their policy renewed doesn’t mean that policy is still in force today.
A group policy generally means that you as the practice owner will pay the premium. It’s not always easy to assess associates for a portion of the cost. Still, it can be used as a perk to attract and keep top talent. Also, most companies that offer group coverage do so at discounts over the individual policy pricing.
We represent the major players in Group Professional Liability coverage and can help you explore your options.
Business Disability Insurance
Most doctors are familiar with personal income replacement disability but what happens to a practice when an owner dentist can’t work due to a disability? Disability insurance can also be called on to cover the ongoing expenses of a dental practice or can be structured to make the payment on a practice related loan when the owner/operator dentist is out on disability. These forms of disability coverage are referred to as Business Overhead Expense and Business Loan Protection (Reducing Term). Disability Insurance can also be structured to fund a buyout (buy/sell) agreement in a partnership or group practice when one of the partner/owners becomes disabled. Unlike personal income replacement disability, business related disability policies can often be paid for as a business expense (pre-tax dollars). That combined with the fact that business related disability products are often cheaper than personal disability products can make these options attractive in addition to being an important consideration.
Dental Practice owners can also pick up short and long term disability as part of a group policy. Short term disability with benefits starting as early as one day after an injury or eight days after the onset of illness can only be purchased through a practice on a group basis. Dentists who can’t qualify for personal income replacement disability insurance themselves because of health related issues can often find coverage available to them as part of a group. The point being that disability insurance can be a versatile financial tool when used properly by practice owners.
Business Owner's Policy
An office policy commonly referred to as a BOP (Business Owners Policy) is one of the broadest and most versatile policies you’ll ever buy. This policy will insure your office property (building, condo or lease space), contents and general liability. It doesn’t stop there. Designed correctly, the policy can also protect your business income, defray the expenses of a data breach, defend you if an employee sues for harassment, cover the loss of embezzlement, etc. etc. etc. The point being that this policy can be set up to insure you against things you haven’t even thought about. BOP policies can be very hard to compare from one company to another. We often tell clients that we can make the BOP cost whatever you want to pay. It’s just a matter of deciding what you want to give up. Still, we find that consumers often fall into the trap of comparing BOP policies based on price.
A BOP policy can be difficult to tailor toward a specific type of business. Of all the mistakes I see made in the insurance world, the most common has to do with omissions of important coverage on the BOP. We understand your practice, the most common risks and how best to address this with the BOP policy.
Worker's Compensation
Workers compensation is designed to cover the costs associated with an on the job injury or illness suffered by employees of the practice. Those costs include medical, disability and lost wages. Owners can choose to include or exclude themselves.
A workers compensation policy is really a combination of two different coverages, workers compensation and employers liability. Workers compensation is unlimited coverage. Employer’s liability coverage is limited to coverage limits you choose but this coverage almost never comes into play. 99% of all employee injuries will be handled on the workers compensation side of the policy.
A business owner is required to carry workers compensation in most states. Even if you are a business owner in a state that doesn’t require you carry workers comp, you need to understand the laws are still stacked against you if you don’t. Carry workers comp and an injured employee can’t sue, workers comp is the recognized remedy for the injury. Choose not to carry work comp and an injured employee can sue you (and probably will) and you can’t defend yourself. The state takes away your common law defenses and you will be held responsible for all expenses regarding the claim.
Workers comp is not expensive for a dental or medical practice. We’re here to help.
Data Breach / Cyber Liability
Your practice records and retains sensitive information about your patients. For most doctors, that information is now mostly stored in electronic form. Are you aware that there are laws in addition to HIPAA that specifically define your duties to protect those records. These same laws also define your obligations if you fail to keep those records safe. Studies have shown that the cost of just the basic obligation you face in the event of a breach (notification and credit monitoring) can cost upwards of $250 per record. Multiply that number by the number of patient records in your database and you’ll begin to understand the exposure. Data Beach/Cyber Liability insurance coverage can help defray the costs associated with a breach. We can often include a small amount of basic data breach coverage on the Business Owners (office) policy. Higher limits and broader coverage can be purchased on a stand-alone policy.
No practice should be without it.
Employment Practices Liability
Employment Practices Liability (EPLI) coverage is designed to defend an employer from allegations of wrongful termination, discrimination or sexual harassment made by an employee, former employee or job applicant. There is no other coverage you carry that will address this type of claim. It is specific and unique coverage. EPLI coverage can often be added to the business owners (office) policy at lower limits of coverage. EPLI can also be purchased in higher limits, often with expanded coverage, on stand-alone policies.
Common Claims Include:
- Wrongful Termination
- Sexual or Workplace Harassment
- Wrongful Discipline
- Age Discrimination
- Violation of Employment Discrimination Laws
- Violation of Americans with Disabilities Act
- Wrongful Failure to Employ or Promote
- Wrongful Deprivation of a Career Opportunity
- Breach of Employment Contract
- Employment Related Misrepresentation
- Failure to Adopt Adequate Workplace Employment Policies & Procedures
- Illegal Retaliatory Treatment
- Invasion of Privacy
- Negligent Evaluation
- Employment Related Wrongful Infliction of Emotional Distress
Dental and medical practices can be a breeding ground for an EPLI claim. We’ve seen an exponential increase in this type of claim over the past five years and expect the trend to continue given the prevailing social climate.
Director’s & Officer’s Liability
Any practice large enough to have seated a board of directors has an exposure that can only be addressed by directors and officers liability insurance (D&O). Individuals who sit on the board of directors of any company (voluntarily or otherwise) place themselves at some level of personal risk simply from their participation. Most lawsuits leveled at board members will not be indemnified or even defended by the other types of insurance in place in the practice. The exposure itself is so great that most learned advisors with recommend declining a seat on a board of directors (even for a nonprofit endeavor) if D&O coverage is not provided.
Commercial Vehicle Coverage
If you own a vehicle in the name of a practice, it must be insured on a commercial auto policy. Not doing so could be catastrophic to your practice. Most doctors don’t realize that even if they don’t own vehicles in the name of the practice, they still have a significant commercial auto liability exposure. Anyone, owner or employee, driving a personal vehicle on practice business is exposing the practice to auto liability. We can help you identify and address this exposure.
Typical coverage includes:
- Bodily Injury Liability - Coverage for damages that involve bodily injury to others for which you become responsible under law.
- Property Damage Liability - Coverage for damage to property of others for which you become responsible under law.
- Medical Payments - Coverage for reasonable and necessary medical expenses and funeral services for those who are accidentally injured while in your automobile or while getting into or out of your automobile.
- Personal Injury Protection - Coverage for medical, hospital, rehabilitation, loss of wages or loss of services costs resulting from injury to you or any resident family member. In case of death to the insured or a resident family member, death benefits and survivor benefits, if applicable, will be provided.
Other coverage that may be obtained include:
- Comprehensive - Protection for the loss of or damage to your vehicle and its equipment from all causes except collision, subject to the deductible on the policy.
- Collision - Protection for the collision damage to your automobile and its equipment, subject to the deductible on the policy. Uninsured Motorist - Coverage allows you to recover bodily injury damages due to an accident where the other party does not have insurance, and is found legally liable.
- Underinsured Motorist - Coverage allows you to recover bodily injury damages due to an accident where the other party is found legally liable and does not have adequate liability limits.
- Additional Expense - Coverage for necessary additional expenses incurred as a result of a loss for which you are protected under comprehensive or collision coverage. These expenses include rental cars, food, lodging and other incidental expenses.
- Hired Auto Liability Coverage - Covers liability for automobiles hired under contract on behalf of or loaned to the named insured.
- Hired Auto Physical Damage - Coverage for an automobile of any type, hired, borrowed or leased on a short term basis for use in the insured's business.
- Employer's Non-Ownership Liability - Coverage for a private-passenger automobile used in the business of the named insured by any person, or the occasional and infrequent use of a commercial automobile in the business by any of your employees.
Small & Large Group Health Insurance
Health Insurance has always been complicated and expensive. Unfortunately, the Affordable Care Act has made health insurance for most of us even more expensive and complicated. It’s gotten so bad in many parts of the country that only HMO Coverage is available to those purchasing individual or family coverage. Basically, if you don’t have the options to secure health insurance through your employer, your options are limited and very expensive.
Right now, Group Health Insurance through a practice will offer greater options and better pricing. Most practice owners have options they likely haven’t even considered, options that could save themselves a lot of money and maybe even make them heroes in the eyes of their employees. Practices with less than 50 employees can often set up a group insurance program that will cost the practice itself little or nothing. We can show you how. It’s important to note that practices with more than 50 employees have an obligation to offer and subsidize health insurance for every employer. Not doing so can lead to heavy fines. We can help you do this efficiently.
Employee Benefits
It can be difficult for a practice to attract and keep the best talent. Group Benefits are one way of differentiating yourself from the competition. Offering short and/or long term disability, vision, accident and critical illness coverage will be appreciated by your team even if they ultimately pay most or all of the cost themselves.
These benefits can only be purchased cost effectively (or even at all) as a group and can only be done so through an employer. As the employer doctor, you can also secure inexpensive short term disability coverage yourself with a little as a 14 day waiting period. Let’s face it, that’s important given the fact that most individual long term disability policies have a 90 day waiting period. We’ve found these products to be very popular among employees and can help you easily set a plan up for your office.
401K / Pension Plan Bond
If your practice has a 401(k) in place for you and your staff, you are required by the IRS to secure a bond in the amount of 10% of the plan assets. These bonds are inexpensive and generally purchased for three year terms. Not having the bond in place can lead to stiff fines. We can help you set up the appropriate bond quickly and easily.
Key Man Life and Disability
Sometimes a practice may employ a person other than the owner who is very important to the daily operation of the practice. That individual is considered “key” to the success of the practice. So, what happens to the practice if that person is no longer there? Life and/or disability insurance can’t replace your key employee but it can provide valuable funds that can help the practice weather the transition. Insuring the practice against the loss of a key individual should be considered when the contribution of a single person is determined to be profound.
Life and Disability Buy-Sell Insurance
When there are two or more owners in a practice and each owner is also responsible for the daily production and overall operation of the practice, consideration needs to be given to what happens to the practice if an owner/partner becomes disabled or dies. The surviving owner or owners need a plan to help the practice itself survive the loss. After all, the practice will be dealing with the loss of production along with the need to buy out the disabled partner or deceased partner’s estate. In many cases, this situation can kill what was a thriving practice but it doesn’t have to. Disability and life Insurance can be structured to fund a buyout (buy/sell) agreement in a partnership or group practice when one of the partner/owners dies or becomes disabled. The money provided can help the practice stabilize and weather the transition.
Personal Home & Auto Insurance
We’ve been conditioned by advertising to believe that Home and Auto insurance is all about price. We’re told that all home and auto insurance policies are created equally. It’s just not true.
At some point, many of us accumulate estates that merit a greater sense of care when it comes to securing insurance coverage. There are “white glove” insurance companies for those who have amassed all the trappings of success. These companies provide more personalized service, broader coverage and make claims much easier to tolerate. Often it doesn’t even cost more to insure with one of these companies. They are looking for successful clients like you and when they find you, they offer their very best pricing. We work with those companies because we work for successful clients like you.
As a dentist, it is critical to maintain underlying limits high enough to support your umbrella coverage. Valuable personal property like jewelry, watches, furs, fine art, musical instruments, etc. should be scheduled on your homeowners or renters policy.
It’s important to note that basic homeowners policies do not cover the perils of flood and earthquake. Coverage for these risks must be purchased separately.
Commercial Umbrella Policy
We recommend that our practice owner clients max out the available general liability, auto liability and employers liability on their basic office related insurance policies (business owners, workers comp and commercial auto). Still, the general liability coverage on the Business Owners (BOP) Policy can only be increased to $2 million dollars.
The employers liability on the workers comp policy and the commercial auto liability maxes at $1 million dollars. A Commercial Umbrella Policy can be purchased to extend coverage limits above and in excess to these basic policies. A commercial umbrella policy will step in to pay the balance of a liability claim against you when the limits on the underlying policies are exhausted. Commercial Umbrella Coverage is sold in increments of $1 million dollars and generally costs around $350 per million.
Commercial Flood Insurance
Insuring your office for the risk of flood requires a specific and separate policy. A standard Business Owners (BOP) Policy will not cover your office for flood damage. Flood coverage is completely underwritten (backed) by the federal government through the National Flood Insurance Program (NFIP) but is purchased through the same sources that you buy you homeowners insurance through, insurance agencies like ours. Flood Coverage is a somewhat limited or basic coverage but if your office is located where the risk of flood is a possibility, you shouldn’t be without it. Please note that a flood is specifically defined as rising water due to the overflow of lakes, creeks and other waterways.
It’s important to include both contents and building coverage on a commercial flood policy even if you are only renting office space. Leasehold improvements (build out) are considered to be part of the building so coverage falls under the building portion of the flood policy.
Commercial Earthquake Insurance
A basic office policy does not cover the risk of earthquake. If your office is located in a seismically active area, securing Earthquake Insurance is imperative. Some companies will add earthquake coverage to the Business Owners (BOP) Policy for an additional premium if you’re in a marginally active area. If your office is located in a high risk area, you’ll need to purchase Earthquake Coverage as a separate policy.