Recently I have been getting a lot of questions about the difference between two insurance situations: personal malpractice insurance versus group malpractice insurance. To make things easy both policies that we write cover the practitioner for the same perils (i.e. what is allowed by your scope of practice). However, the difference is in who can be listed as a ‘Named Insured.’
A personal malpractice policy will allow an individual to be listed as the ‘Named Insured’ and in some cases it will list an entity or organization as an ‘Additional Insured.’ This policy is perfect for the individual practitioner who structures their business as a sole proprietorship, and can work under a DBA name. The downside to this policy is that once a business is incorporated, or a partnership is formed, there is no coverage for the entity that is created. Therefore with the personal malpractice policy one’s personal assets are insured, but the business entities are not.
The solution to incorporating a business is the group malpractice policy. This policy will list a business name or organization as a ‘Named Insured.’ In doing so the business will not only be insured in the event of a lawsuit, but the business also will protect all listed practitioners who are named in a suit if they were working for the business or entity when the claim occurred.
Although it would appear to be a simple decision to choose an individual malpractice policy if you are a sole proprietor or a group malpractice policy if you are an incorporated business, it is not. The reason it is not so simple is because there are state regulations and health insurance billing requirements that healthcare practitioners must follow in order to maintain their license, or to get paid for a claim.
If you have any questions about this feel free to call us and we will give you the advice you need to navigate these circumstances.