For the success of a physician practice, a comprehensive insurance program is vital for protecting the practice against unforseen loss. The physician needs Professional Liability Insurance to protect the practice against errors and omissions involving patient contact. Also known as physician malpractice insurance, this important coverage is designed to protect the physician and his practice for claims for alleged malpractice in rendering or failing to render professional services.
We will look closer at some of the other coverages available to a physician and his practice.
Business Property and Liability Insurance
A physician practice needs to protect itself against loss to property or a lawsuit based on what he did or failed to do that caused harm to another’s person or property. This type of insurance is usually purchased separate from the physician professional liability insurance policy. A small practice will purchase a Business Owners Package (BOP), which bundles property and liability coverages together and thus reduces the cost of this important insurance. The policy has other protections, like business interruption insurance, crime insurance, valuable records, and accounts receivable coverage. In some cases, exposure such as Cyber Liability can be endorsed on to the policy for an additional premium.
Workers Compensation Insurance
Florida law requires that a physician practice with four or more employees purchase workers compensation insurance. Workers Compensation insurance is normally a separate policy. Rates are set by the State of Florida, and the cost is solely based on payroll. Some companies offer dividend programs for small practices.
The purpose of workers compensation insurance is to provide employees with financial compensation for medical bills and lost wages due to work-related injury or sickness. Workers compensation benefits are paid regardless of who is at fault in the accident. The Employers Liability coverage protects the physician from lawsuits involving work-related accidents or sickness. The physician can elect to include or exclude himself from this coverage. If a physician practice hires another healthcare practitioner, his or her salary is included in the cost of the insurance. The physician practice may wish to make this practitioner an officer and exclude coverage.
Cyber Liability Insurance
With more and more patient health information being transmitted electronically, physician offices face increasing liability associated with cyber risks. Cyber liability insurance is offered as either a stand alone policy or an endorsement to an existing policy.
Recently, there were some significant changes to the HIPAA/HITECH Federal law covering Personal Health Information (PHI) which place more responsibility on the physician to protect the privacy of his patients. The HIPAA/HITECH Federal Law became effective on March 26, 2013 and became enforceable by the Office of Civil Rights and the State Attorney General on September 23, 2013. Failure to comply could result in a monetary fine up to $1,500,000.
The HIPAA (Health Insurance Portability and Accountability Act) HITECH (Health Information Technology for Economic and Clinical Health) Federal Law requires the following items as assurances to safeguard personal health information:
- New requirements regarding Business Associate Agreements
- Requirements to provide patients with electronic copies of their records
- Mandates requiring businesses to have in place the following in regards to protecting personal information:
- Policies and procedures for maintaining confidentiality
- Data encryption for electronic health record systems
- Staff training to promote an environment of compliance
Incident response plans in the event of a data breach
According to Leon Rodriguez, Director of the Office of Civil Rights, “These changes not only greatly enhance a patient’s privacy rights and protections, but also strengthen the ability of my office to vigorously enforce the HIPAA privacy and security protections, regardless of whether the information is being held by a health plan, a health care provider or one of their business associates.”
A Cyber Liability insurance policy covers damages stemming from third-party losses and network privacy. For example, if someone hacks a patient’s medical records, the patient can sue the physician for damages. The cyber liability policy would defend and pay any damages up to the limits of the policy. Secondly, the cyber liability policy covers first-party losses. For example, loss or damage to electronic data, loss of a pracitice’s income associated with a data breach, losses from cyber extortion, and notification costs, which can be very high based on the number of patients in a practice. A cyber liability policy will, thirdly, cover media costs associated with protecting the reputation of the physician who has suffered a data breach. In addition, as a policyholder, the doctor has access to services that will assist his practice in creating policies and procedures, provide sample business associate agreements, staff training to ensure compliance in your practice, a monthly newsletter that highlights changes to any state laws, and much more.
Employment Practices Liability Insurance
In the past, employees gathered around the water cooler to complain about the boss. Now they do their complaining at the local EEOC office. Word has gotten out-with extensive media coverage- that a disgruntled employee or former employee can get a settlement for very little effort. And, in a tanking economy, it is even worse. Suing an employer is easier than collecting unemployment. Increased diversity in the labor force offers a fertile field for discrimination claims. With baby boomers aging, age discrimination claims are up significantly. Employers are more vulnerable than ever.
Employment Practices Liability Insurance (EPLI) covers the physician practice against claims by employees that their legal rights have been violated. Examples of such claims include: Wrongful Termination, Discrimination, Sexual or Workplace Harassment, Breach of Employment Agreement, Wrongful Hiring, Defamation, Failure to Promote etc.
Purchase of Employment Practices Liability Insurance gives the physician benefits as follows:
- Hotline access to employment attorneys from a well-known and highly respected national workplace law firm.
- Sample employment policies and forms, which can be an invaluable resource for the practice, so the physician does not have to develop such policies on his own.
- Training bulletins on current employment issues, to keep the Florida physician up on the latest workplace law trends.
Living in a litigious society in a litigious state like Florida certainly has its costs. Insurance to protect the physician and his practice against the employee who knows their rights and has an attorney on speed dial is one of them. EPLI is not an emerging trend. It has emerged!
Working with an independent agent like Gracey-Backer, Inc., which has specialized in the sales and service of insurance for the healthcare provider since 1925, gives the Florida physician the special advantage of having all his policies through one agency. This gives the agent a comprehensive understanding of the needs of the physician and his practice so it can be continually monitored to ensure that adequate coverage is in place.
Barbara Gracey Backer, CIC, is the Vice-President of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Professional and Personal Insurance for the Healthcare Provider. She may be contacted at 800-272-6055, ext 128, or at firstname.lastname@example.org.