Now that you’ve set up some important pieces of your medical office and created your business as a legal entity, your next step is to get medical practice business insurance to protect your investment. It’s important to have insurance to cover all aspects of your business, and unlike other professions, medical practice insurance comes with its own needs and risks. Different types of coverage may be required by professional regulatory bodies to protect patient safety, required by your lenders to protect their financial investment, or required by your landlord to protect your physical office space. Whether it is a requirement or a choice, it’s important to be properly covered.
Here are some of the types of insurance you will need:
1. Medical Liability Insurance
Medical liability insurance coverage can be obtained through the Canadian Medical Protective Association (CMPA) and will give you the right to legal representation in the event that you harm a patient and are sued. This type of insurance is a requirement for all physicians operating in Canada, and for good reason – doctors who pay into this coverage are protected by the CMPA, who will legally defend them in court in the event of a malpractice suit. Since the Canadian legal system is quite active in discouraging patients from suing their physicians, the coverage provided is extensive and worthwhile. Even better, provincial governments reimburse doctors for about 83% of their membership fees to these governing bodies.
2. Medical Practice Business Insurance
The next important coverage to have for your medical practice is business insurance. This is an umbrella term that can cover a number of different areas, including:
Business overhead insurance
If you become unable to practice, this coverage will help to pay your fixed overhead expenses, like rent, utility bills, and property taxes, until you can work again. This coverage is an especially good idea if you are planning to have a larger practice and have high fixed expenses, or if you are a new practice without enough savings to protect yourself in the event of an emergency. In general, it’s a good idea to work with your accountant ahead of time to look at your fixed expenses and see what your coverage needs are. Take into account the different methods of financing that you have used and the loan protection coverage you might already have in place.
Business interruption insurance
In the event of unforeseen natural disasters or world events, this insurance will help you get back on your feet. This coverage can be offered by itself or as part of a larger business insurance policy and is usually different from your regular property insurance in that it also protects you from lost wages over the course of the unforeseen events.
General liability insurance
This coverage is included in many medical practice insurance packages to cover the cost of any injuries or property damage caused by or on the premises for your business. This coverage is crucial for all business owners and protects your liability against unexpected things that could happen – slips, trips, or falls in the waiting room, broken electrical lines in the parking lot, or any other hiccups that could hurt your practice.
There are plenty of options for medical practice business insurance packages, so it is a good idea to compare coverage between insurance companies to see what is included. Check to see whether coverage overlaps with some of the other areas where you are insured, and double check that you have enough coverage to protect you in the event of an unexpected situation.
3. Property Insurance
Property insurance is an essential part of your medical practice insurance. A good property insurance policy for your medical practice will protect your building from natural disasters and damage as well as valuing and insuring the equipment you own. Medical professionals should make sure to get an accurate valuation for your insurer that includes the property value and the value of any special equipment you have in the office like x-ray machines, ultrasounds or surgical equipment. Make sure you have an insurer who is familiar with medical practice as different coverage may be required on more specialized or expensive pieces of machinery.
4. Worker’s Compensation & Group Disability Insurance
The next important part of your medical practice to protect is the well being of your employees. If you operate a business in Canada, you are required to register for and pay Worker’s Compensation Insurance (WCI) premiums based on the classification of your business. WCI is provincially regulated, so insurance premiums and coverage will vary from province to province. In Canada, virtually every business is required to register for and pay into WCI coverage for its employees. Premiums are set at a certain dollar amount per $100 of payroll and should be applied against every paycheque – the amount of these premiums will depend on which province you live in and your industry, and paying them will be handled by your payroll staff and your accountant.
On the other side, group disability benefits also protect your employees in the event of injury or the inability to work, however, these benefits are not required. These benefits protect injured or disabled employees from lost or missing wages and will help you keep your employees long term, since good disability coverage will help employees get back to work faster and reduces the risk of needing to rehire an employee if they are injured or unable to work. As a medical practice owner, you are free to choose from a variety of coverage offered by different insurance plans, so it’s a good idea to do plenty of research and pick one that fits the needs of your practice.
5. Life Insurance
Having life insurance policies for you and for your employees is especially important in the medical field. As physicians, you are the main asset to your medical practice – so protecting yourself and your loved ones through a good life insurance policy is always a good idea. Choosing a life insurance policy specifically made for medical professionals and getting one early on in your practice will help you get the most coverage at the lowest possible premium.
There are different tiers of life insurance available, and it’s a good idea to plan ahead in terms of the deductible and the amount of coverage. As a doctor operating a new medical practice, especially if your loans are personally guaranteed, it’s a good idea to get as much coverage as possible. This will not only ensure the solvency of your own family in the event of your death, but will also help you
r practice to continue and make it easier on any of your business partners. Many physicians and business owners will make life insurance mandatory for all key members of their medical office’s management team.
6. Financial Insurance
If you took loans out to finance your business operations, the next thing you should consider is how you will protect this liability against unforeseen loss of business. Some business insurance plans, like business overhead insurance or business interruption insurance, will include the payments on your loan as part of your fixed overhead. However, it’s always a good idea to double check your coverage and make sure you have the necessary amounts in place. If you have a large loan or you financed your office through a mortgage, it’s a great idea to make sure you have insurance to cover the value of your interest or principal payments in the event of a business slowdown or unforeseen disaster. If your loans are large, this money could mean sink or swim for your business – so make sure to have the right protection.
7. Business Auto Insurance
If you’re using cars as part of your medical practice, especially if your clinic is mobile or offers home visits, then it’s a great idea to have additional protection on any vehicles that you use for business – your commercial automobile policy will not cover these vehicles if they’re being used for business purposes. If you’re planning on making house calls, business auto insurance is an essential. If you are mainly going to be operating out of your practice, this insurance is still a good idea if you’re going to be teaching, traveling, or driving to conferences, since these activities may not be covered by your regular plan.
Whichever coverage you choose, it’s important to take a look at all the insurance that you currently have and double check to make sure no coverages overlap or are missing. Having the right insurance will help you to start your new medical practice on firm footing, and make it much easier for you to survive your first year in operation.
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.
