HEALTHCARE & SOCIAL SERVICES

Whether it’s medical errors, patient injuries in your building, employee claims of work-related harm, or simply damage to your building or equipment, running a healthcare or social work facility is fraught with risk. Both for-profit and nonprofit medical businesses face these risks. Here we look at some of the most common insurance coverages and loss-control programs that protect healthcare or social services businesses.

Some of the major coverages medical, dental, and mental health providers need include:

• General liability insurance: Covers patient or visitor injuries on your premises not related to medical procedures (slips and falls are typical of this category)

• Professional liability: Covers errors and omissions in client/patient care that result in harm (medical malpractice is a type of professional liability insurance)

• Sexual abuse and molestation: Covers claims that staff or practitioners assaulted someone in their care

• Business property insurance: Covers your building and its contents

• Business income insurance: Keeps revenue flowing even if your office must shut down due to a fire or other covered event

• Cyber liability: Insures against costs of a data breach or other cyber attack

• Workers compensation: Pays for medical care, some lost wages and other benefits for employees injured or sickened on the job

• Employment practices liability: Covers employee complaints of workplace mistreatment

• Excess/umbrella: Extends the dollar amount of coverage you have under your primary liability policies

• Commercial auto: Provides coverage a personal auto policy doesn’t if you have your own professional corporation (PC) and drive to patient appointments in schools, hospitals or other facilities

Here’s how each of these benefits your practice.

General Liability Insurance for Medical, Dental & Social Workers

The most basic liability policy is general liability. It helps pay for injuries sustained by visitors on your premises that aren’t the result of direct care. Falls, cuts, and chemical burns are examples. These injuries can also be covered if they result from accidents in a home care or off-site visit, where people might trip on a piece of your equipment or erroneously handle a sharp instrument that wasn’t properly discarded or monitored.

Professional Liability Insurance for Medical, Dental & Social Workers

No person dealing with the physical or mental care of others should go without professional liability insurance, also called medical malpractice insurance. It is available for allied health workers, residents, nurses, surgeons, anesthesiologists, physicians, radiologists, dentists, psychologists, psychiatrists, mental health counselors, and all others who take part in the care of patients. 

It covers costs related to errors, omissions and negligence in the course of professional duties and can help pay for patient recovery, disability, fatality and lost income, as well as legal defense costs. Many medical malpractice or professional liability claims are also awarded punitive damages. The legality of whether punitive damages can be assessed and how high those damages can go differs by state. Moreover, most medical liability policies exclude punitive damages from coverage (or severely restrict the dollar amount). Speak with an insurance agent about this risk, especially if you live in a state that allows punitive, or non-economic, damages. Some states bar or restrict insurance for this risk, and insurance for it is hard to find and afford. Because health care professionals are on the front line of providing care, they can be unjustly blamed and sued. Professional liability can pay for lawsuit costs, regardless of merit.

Sexual Abuse & Molestation for Medical, Dental & Social Workers

The number of sexual abuse and molestation claims is on the rise and in addition to facing a civil suit, you may face criminal charges. Coverage for these incidents (frequently dubbed SAM claims) is often excluded from general and professional liability insurance. When they aren’t excluded, many insurers set high deductibles (or co-insurance), a separate premium and a sublimit (or specific cap) on SAM protections. If your professional liability insurer won’t cover this risk, you will need to purchase stand-alone sexual abuse and molestation coverage.

Coverage goes beyond legal defense and settlement costs. It can also help pay for investigations and crisis management, which can run tens of thousands of dollars. You will need to speak with your insurance agent about long-tail insurance and claims-made versus claims-reported insurance. According to the FBI’s Law Enforcement Bulletin, many states have passed “lookback laws,” which allow claimants to sue for incidents they allegedly recall from long ago, while others have removed or extended the statutes of limitations for bringing such suits. 

To be a good candidate for sexual abuse and molestation insurance, you should have a documented SAM-prevention program that includes 100% employee background checks and training, never-violated supervision procedures (such as always having a medical assistant in the room when dealing with vulnerable patients), and verifiable, airtight recordkeeping.

Business Property Insurance for Medical, Dental & Social Workers

Your business property typically includes your building, equipment, furnishings, and records, though your landlord is usually responsible for insuring the building if you lease your space. Commercial property insurance will cover your property for fire, water damage (though not flood), storms, explosion, vandalism and theft. If your office is near a body of water, dam or stormwater system, you should consider flood insurance, and those working in earthquake- and wildfire-prone regions may need specialty policies for those perils.

It can also be written with extra expense coverage to help with costs of renting replacement equipment during repairs. Most medical and dental practices rely on functioning equipment, so ask your agent about equipment breakdown coverage options. Sometimes a business property policy can include it; in other cases, you will need to purchase it separately. It helps pay for repairs of critical systems, such as refrigeration, testing and diagnostic equipment, computers and HVAC, and it will keep revenue flowing if your practice is shut down for a specified time due to covered damage to or failure of your equipment. 

Some therapists may have a separate office in their home to see patients. It is very likely that your homeowners policy excludes coverage for “business pursuits,” so you will likely need to have your home added under your general liability policy in case a patient gets hurt at your home.

Business Income Insurance for Medical, Dental & Social Workers

There are events other than equipment failure that could shutter your practice and disrupt income. For those, you need business income insurance, also called business interruption insurance. This coverage requires physical damage, such as fire or wind, to occur to your site for the policy to kick in. You can also have it written to cover closures due to utility failures and other off-site risks that block use of your office. Talk to an insurance agent about the value of such coverage, especially if you work in an area particularly prone to hurricanes, ice storms and tornadoes.

Cyber Liability Insurance for Medical, Dental & Social Workers

The health industry is one of the most attacked sectors by cyber criminals because healthcare providers have a rich set of data on many patients that can be sold. Cyber liability insurance helps pay for notifications, forensic investigations about the cause, ransom to unlock access to systems (sometimes), crisis management, and compensation to victims, which may include actual dollar payouts or simply the cost of ongoing identity theft monitoring. Though some cyber coverage is available in many general liability policies, it’s a good idea to get stand-alone cyber insurance since the health industry is so vulnerable and the cost of a breach can far exceed basic coverage. 

Know that cyber insurers are becoming much more demanding of policyholders. You will be expected to follow high standards for data protection, system monitoring, and user training and testing. A special focus on impersonations and email phishing can eliminate most of the human errors that give hackers access to networks.

Workers Compensation Insurance for Medical, Dental & Social Workers

The health industry is notorious for its number of workers comp claims due to employees’ high risk of musculoskeletal strain, needle sticks, falls, injury by patients, and stress overload. Workers compensation insurance is required in almost all states, but practices with partner-owners and fewer than five employees may have special circumstances. In some states, very small practices are not required to carry workers comp for employees, but doing so leaves your business open to liability lawsuits. Additionally, owners and partners of practices can often exempt themselves from workers comp coverage, even if your staff is covered. You’ll need to assess the cost versus the benefit of such exemptions, since partners and owners are not at a reduced risk of work-related injury or illness.