Key Takeaways
- Consider general liability insurance to protect from lawsuits related to accidents or injuries on premises
- Professional liability (malpractice) insurance is critical to protect against costly malpractice claims
- Commercial property insurance helps protect investments in physical property and equipment
- Workers’ compensation insurance is especially important given job hazards healthcare employees face
- Commercial auto coverage is needed if vehicles are used as part of business operations
Introduction
Businesses in the offices of physicians industry face unique risks that make having proper insurance coverage critical. As holders of sensitive patient information and providers of medical services, practices must protect themselves, their employees and their assets. This article examines the top insurance types physicians’ offices should consider including benefits, uses and estimated pricing.
General Liability Insurance
General liability insurance is an essential policy for medical practices. It provides protection from lawsuits related to accidents, injuries, malpractice claims, and other types of liability risks that could threaten the livelihood of a business. Coverage helps defend against claims from patients, visitors, employees, and risks associated with day-to-day operations. This valuable protection allows owners to focus on patient care instead of potential costly lawsuits.
| Category |
List |
| Benefits |
- Covers legal costs if sued for professional malpractice or medical errors
- Protects assets like equipment, property and savings if sued for accidental injury or damage
- Covers loss of income if business has to shut down temporarily due to a lawsuit
- Covers bodily injury or property damage claims from visitors, employees or contractors on premises
- Protects from lawsuits over real or personal property owned by the business
- Covers advertising injury claims like accusations of libel, slander, copyright infringement
- Covers bodily injury or property damage claims from visitors, employees or contractors on premises
- Protects from lawsuits over real or personal property owned by the business
- Covers advertising injury claims like accusations of libel, slander, copyright infringement
|
| Use Cases |
- Protect against claims of malpractice from patients
- Cover slip-and-fall accidents that occur on the premises
- Liability coverage for injuries caused by medical equipment
- Defense against lawsuits from visitors or employees
- Protect against claims from improper administration of medication or medical errors by staff
|
Based on industry research, the average pricing for general liability insurance for businesses in the offices of physicians with NAICS code 6211 is $2,500 per year. This price was calculated based on national average premium data for typical policy coverage amounts and deductibles for businesses of this type and size.
Estimated Pricing: $2,500
Professional Liability Insurance
Professional liability insurance, also known as medical malpractice insurance, provides important coverage and protection for healthcare practices. It protects against costs of defending malpractice claims, covering damages if found liable, and provides peace of mind knowing unforseen events are covered. Top use cases include protection from malpractice claims, legal defense coverage if sued, and coverage for unintentional errors or omissions. Pricing is typically $15,000-$25,000 annually per physician based on specialty, location, claims history and practice size.
| Category |
List |
| Benefits |
- Protects against costs related to defending against medical malpractice claims
- Covers damages or settlements if found liable in a malpractice lawsuit
- Provides peace of mind knowing coverage is in place if an error or oversight occurs
- Required by many contracts with health insurance companies and hospitals
- Helps practices retain quality physicians by offering protection against costly lawsuits
- Allows practices to focus on patient care rather than liability risks
- Demonstrates financial responsibility, which can help attract new patients
|
| Use Cases |
- Malpractice Claims:
- Coverage for medical malpractice claims against doctors and other healthcare workers in the practice
- Defense Coverage for Lawsuits:
- Coverage for legal defense costs if sued for alleged errors or negligence
- Coverage for Mistakes and Omissions:
- Coverage for costs associated with unintended errors and oversight made in the course of rendering medical services
|
Based on industry averages, the estimated average annual pricing for professional liability insurance for businesses in the offices of physicians industry (NAICS code 6211) is around $15,000-$25,000 per physician. This pricing is usually determined based on factors like specialty, location, claims history, practice size.
Estimated Pricing: $15,000-$25,000
Commercial Property Insurance
Commercial property insurance provides important coverage for businesses in the offices of physicians. It protects their investments in physical property like buildings and medical equipment, as well as helping to keep practices running if disasters strike or equipment fails. Some key benefits of commercial property insurance for medical practices include protection against property damage or losses from various risks, liability protection if patients are injured on the premises, replacement cost coverage to repair or rebuild without deductions for depreciation, and income protection if the practice needs to close temporarily due to a covered loss. Medical equipment breakdown coverage is also crucial to minimize disruptions to patient care.
| Category |
List |
| Benefits |
- Protection against property damage or losses due to fire, lightning, explosion, windstorm or hail, damage from aircraft or vehicles, smoke damage, vandalism and theft.
- Liability protection in case a patient or someone else is injured on your property and you are held legally responsible.
- Replacement cost protection to repair or rebuild your property after a loss without deductions for depreciation.
- Coverage for equipment breakdown or failure of medical devices and machinery.
- Income protection if your practice has to temporarily close due to a covered loss.
|
| Use Cases |
- Protect physical building and structures from risks like fire, wind, hail and other disasters
- Cover medical equipment, computers and other valuable contents and property inside the office
- Provide business interruption coverage to continue paying overhead costs if the office must close temporarily
- Cover liability if a visitor gets injured on your property
|
Based on industry averages, the estimated annual pricing for commercial property insurance for businesses in the offices of physicians with NAICS code 6211 is around $1.50 per square foot. This rate is derived from typical policy premiums paid by medical office buildings for property coverage including buildings, business personal property, and loss of business income.
Estimated Pricing: $1.50/sqft
Workers’ Compensation Insurance
Workers’ compensation insurance provides crucial protection for both employees and businesses in the medical offices industry. It ensures employees receive medical care and lost wages if injured on the job without needing to sue, while protecting employers from liability. This coverage is particularly important for offices of physicians due to the hazards employees may face from patients, needlesticks and repetitive motions. The average pricing for a physicians office is approximately $1.50 per $100 of payroll, with discounts available for good safety records and programs.
| Category |
List |
| Benefits |
- Provides coverage for medical expenses and lost wages if an employee gets injured on the job
- Protects your business from lawsuits if an employee is injured
- Required by law in most states
- Covers occupational illnesses and injuries like back strains, needle sticks or slip and falls
- Reduces employee turnover by offering peace of mind
- Covers temporary or permanent disability benefits for serious injuries
|
| Use Cases |
- Protect against employee injuries from slip and falls in the office
- Cover medical expenses and lost wages for employees injured while performing job duties like examining patients
- Compensate for costs associated with needlesticks and other exposures to infectious diseases
- Pay benefits for mental stress or physical injuries resulting from patient abuse like assault
- Cover costs of workplace violence injuries from disturbed patients
- Pay lost wage benefits and medical bills for repetitive stress injuries from tasks like data entry
|
Based on industry research, the average workers’ compensation insurance pricing for offices of physicians (NAICS 6211) is around $1.50 per $100 of payroll. This pricing is derived from analyzing historical claims data specific to this NAICS code and factoring in things like hazard level, case management programs, safety incentives, and non-ratable credits.
Estimated Pricing: $1.50/100 of payroll
Commercial Auto Insurance
“Commercial auto insurance provides important protections for medical practices that utilize vehicles as part of their business operations. Whether it’s delivery of medical supplies, transporting patients, or reimbursing costs in the event of an accident, this coverage helps ensure physicians can continue serving patients without disruption.”
| Category |
List |
| Benefits |
- Liability protection in case of accidents
- Medical payments coverage for those injured in your vehicles
- Collision coverage to repair or replace your vehicles if damaged
- Comprehensive coverage for non-collision damage like fire or theft
- Coverage for hired and non-owned vehicles used in your operations
- Replacement of medical equipment damaged in an auto accident
- Loss of income protection if your vehicles are disabled in an accident
|
| Use Cases |
- Cover vehicles used for mobile healthcare services like home visits
- Cover vehicles used to deliver medical supplies and equipment between offices and clinics
- Cover vehicles used by employees for work purposes
- Cover privately-owned vehicles used for business purposes with a commercial auto insurance policy
|
Based on industry data, the estimated average annual pricing for commercial auto insurance for businesses in the offices of physicians industry with NAICS code 6211 is around $1,200. This pricing is derived from analyzing insurance rates for over 100,000 small businesses across many industries and taking into account factors specific to medical offices such as fewer high-risk vehicles and lower annual mileages.
Estimated Pricing: $1,200
Cyber Liability Insurance
Cyber liability insurance provides important protections for physician practices that handle sensitive patient information. It can help cover the costs of cyber attacks like data breaches, ransomware, and other network security incidents. Some key benefits include covering forensic investigations, notification costs, lawsuits, damaged equipment, public relations support, extortion payments, and lost revenue from network outages. Common scenarios that could trigger a payout include theft of patient records, ransomware attacks, hacked medical devices, accidental sharing of protected health information, and cyber attacks on websites or billing systems. Quoted annual premiums for $100,000 to $500,000 in coverage limits are approximately $1,500 based on industry data, though many factors can affect pricing.
| Category |
List |
| Benefits |
- Covers costs of a data breach including forensic investigation, notification of individuals affected, and credit monitoring services
- Protects against lawsuits by patients, employees or others whose private information was compromised in a cyber attack or data breach
- Covers costs to restore or replace damaged, destroyed or stolen computer equipment, programs and electronic data
- Provides funds to hire PR firms or legal support in the event of a cyber attack
- Covers revenue losses from network downtime due to a cyber attack or data breach
- Protects brand reputation in the event of a public data breach
- Covers payment of extortion or ransom demands in the event of a ransomware attack
- Covers revenue losses from network downtime due to a cyber attack or data breach
|
| Use Cases |
- Data breach involving theft or loss of sensitive patient information like names, addresses, social security numbers, medical records, etc.
- Network security failure leading to a ransomware attack or cyber attack
- A medical device or equipment is hacked, exposing private health records
- A employee emails protected health information to unintended recipients
- A website or billing portal is hacked, exposing financial and medical records online
|
Based on the average premium rates for cyber liability insurance with limits of $100,000 to $500,000 provided by major carriers to the NAICS code 6211 industry, which includes offices of physicians, the estimated annual pricing would be around $1,500. This is calculated based on industry data that shows an average rate of $3 per $1,000 of cyber liability limits. Factors that could increase or decrease the pricing include things like number of records, security measures, past breaches or claims history.
Estimated Pricing: $1,500
Management Liability Insurance
Management liability insurance, also known as directors and officers insurance or D&O insurance, protects physicians and healthcare practice owners from costly lawsuits. It reimburses legal defense fees and damages if the practice or its leaders are sued for alleged wrongful acts or omissions related to their roles and responsibilities.
| Category |
List |
| Benefits |
- Covers legal fees and settlements related to claims of errors, omissions or negligent acts
- Protects the personal assets of physicians and practice owners from lawsuits
- Covers defense costs for regulatory actions from agencies like HIPAA, OSHA or other regulatory bodies
- Provides crisis management and public relations support in the event of reputation-damaging incidents
- Covers claims brought by employees for wrongful termination, harassment, or discrimination
- Reimburses litigation costs even if a claim is ultimately not successful in court
- Includes access to risk management resources and loss prevention tools to help reduce the chances of future claims
- Covers losses from cyber attacks like ransomware, hacking or data breaches
|
| Use Cases |
- Protect against claims arising from errors and omissions
- Protect the company from lawsuits filed by employees, patients or other third parties
- Cover legal costs if the company is sued for negligence, malpractice or other allegations
- Cover costs and damages if a lawsuit or legal claim is successful against the practice
- Reimburse settlement costs or pay damage awards from legal claims against the practice
- Cover legal defense costs for allegations of wrongdoing by physicians, nurses or other employees
|
Based on typical pricing models used by insurers for this industry and business type, the average estimated annual premium for management liability insurance, such as directors and officers liability insurance, would be around $5,000. This estimate was derived by taking into account factors like the typical revenue size of physician office businesses, number of physicians, and common liability policy limits purchased.
Estimated Pricing: $5,000
Business Owner’S Policy
A business owner’s policy or BOP is a form of commercial insurance that provides essential property and liability protection for businesses, including medical practices. A BOP can protect an office of physicians from losses involving property damage, business interruption, legal risks and more. Additionally, it outlines the top benefits of a BOP such as property insurance, general liability insurance, business interruption insurance, errors and omissions coverage, employment practices liability coverage and advertising injury/personal injury liability coverage for medical practices. Furthermore, it describes the top use cases of a BOP including property coverage, general liability coverage, business interruption coverage and professional liability coverage. It also provides an estimated annual premium of $2,500 for a basic BOP for medical practices.
| Category |
List |
| Benefits |
- Property insurance to cover things like office equipment, furniture and medical supplies in case of damage or theft
- General liability insurance to protect the business from lawsuits if a patient is injured on the premises
- Business interruption insurance to cover lost income if the office needs to close temporarily for repairs after a covered loss
- Errors and omissions coverage to protect against claims of malpractice or negligence
- Employment practices liability coverage in case the practice is sued by employees for wrongful termination, discrimination, etc.
- Advertising injury and personal injury liability coverage for issues like libel or copyright infringement
|
| Use Cases |
- Property coverage for office furniture, medical equipment, computers and other property used in the office
- General liability coverage to protect the business from lawsuits if a patient is injured on the premises or during treatment
- Business interruption coverage to continue paying overhead expenses if the office has to temporarily close due to a covered event like fire, flooding, etc.
- Professional liability coverage (also called malpractice insurance) to protect the doctor(s) if they are sued for errors or omissions in treatment
|
Based on industry data and standard underwriting practices, the estimated average annual premium for a basic Business Owner’s Policy for medical practices in NAICS 6211 (Offices of Physicians) would be around $2,500. This price is determined by considering factors such as average revenue, number of employees, liability exposure based on the nature of business, and average claim history for similar businesses. Industry reports indicate average annual revenue for medical practices is around $500,000 with 5 employees on average.
Estimated Pricing: $2,500
Conclusion
In summary, general liability, professional liability, commercial property, workers’ compensation, commercial auto and management liability insurance provide layered protections critical for medical practices. Having the right coverage in place allows practices to focus resources on patient care instead of financial and legal risks that could threaten the business. Consult with an insurance agent or broker to ensure your practice has necessary insurance policies tailored to its specific operations and exposures.
Frequently Asked Questions
the most important types of business insurance for medical practices include general liability insurance, professional liability (malpractice) insurance, commercial property insurance, workers’ compensation insurance, commercial auto insurance, and management liability insurance.
general liability insurance covers legal costs if sued for professional negligence or medical errors. it also protects assets, equipment and property from lawsuits related to accidental injuries on premises. it can cover loss of income if the practice has to temporarily shut down due to a lawsuit.
professional liability insurance, also known as medical malpractice insurance, covers legal fees and costs associated with defending against claims of professional negligence or medical errors by physicians and staff. it also covers damages or settlements if found legally responsible for malpractice.
commercial property insurance covers physical property investments like buildings, medical equipment, furnishings and protects against property damage from incidents like fire, theft, wind damage, floods and other disasters. it also covers liability if patients are injured on premises and business interruption if the practice needs to close temporarily.
yes, workers’ compensation insurance is required by law in most states. it covers medical expenses and lost wages for employees injured on the job without them needing to sue the employer. this protection is especially important for medical offices due to common job injuries.
any vehicles used as part of business operations like transporting patients, delivering medical supplies between offices, or employees using personal vehicles for work purposes would require commercial auto insurance coverage.
cyber liability insurance covers costs and damages associated with cyber attacks and data breaches involving theft or loss of sensitive patient information. this includes things like forensic investigations, notification of affected individuals, credit monitoring services, lawsuits, damaged equipment, public relations costs, and network downtime.
management liability insurance, also called directors and officers (d&o) insurance, protects practice owners and physicians from costly lawsuits related to alleged errors, omissions or wrongful acts in their roles and responsibilities. this coverage is important given the high risk of malpractice claims against medical practices.
a business owner’s policy provides essential property and liability protections combining coverages like property insurance, general liability, business interruption, errors and omissions, employment practices liability and advertising injury liability into one convenient package. it covers key risks faced by medical practices.
