The Top 7 Business Insurances Medical Insurance Carriers With NAICS Code 524114 Should Consider

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A guide to the most important types of business insurance for medical insurance carriers to protect against legal risks, financial losses, and ensure business continuity.

Key Takeaways

  • General liability insurance protects against costly lawsuits from injuries or errors.
  • Property insurance covers damages to buildings and equipment from events like fires and floods.
  • Professional liability insurance covers legal claims from clients due to mistakes or errors.
  • Workers compensation insurance covers medical costs and lost wages for injured employees.
  • Cyber liability insurance protects against costs of data breaches and cyber attacks.
  • Directors and officers insurance protects company executives from lawsuits over business decisions.
  • Employment practices liability insurance defends against employment-related legal claims.

Introduction

As a medical insurance carrier, your business faces unique compliance and litigation risks that require proper insurance protections. This guide examines the top 7 types of commercial insurance coverage your company should consider to mitigate legal risks, financial losses, and ensure business continuity.

General Liability Insurance

General liability insurance provides important protection for direct health and medical insurance carriers against costly lawsuits and claims. It covers legal fees, medical expenses, loss of income, and other costs if the business is found legally responsible for injuries or damages due to its operations.
Direct health and medical insurance carriers face risks of lawsuits from policyholders alleging improper denial of claims or inadequate coverage. They also risk infringing on others’ copyrights, patents, or trademarks through their business operations. General liability insurance helps protect against these costs and allows the business to focus on serving its customers. Furthermore, for carriers in this industry, general liability coverage is especially important as it can protect against injuries caused by medical professionals as well as cyber liabilities and other operational risks.

Category List
Benefits
  • Covers legal fees and costs if sued
  • Covers cost of damages if at fault for injury or property damage
  • Covers medical expenses if someone gets injured on your property
  • Covers loss of income if business operations are disrupted due to a lawsuit
  • Protects business assets from being seized to pay for costs not covered by the policy
  • Provides peace of mind knowing the business is protected from significant lawsuits
Use Cases
  • Covering damage or injuries caused by medical professionals, such as doctors and nurses providing coverage
  • Covering damage or injuries caused by operations of the business, such as clerical errors, data breaches, or outages of technology systems
  • Covering lawsuits from policyholders alleging improper denial of claims or inadequate coverage
  • Covering lawsuits from other businesses for copyright, patent, or trademark infringement due to business operations

Based on industry research and analysis of insurance rates for businesses in the Direct Health and Medical Insurance Carriers industry (NAICS Code 524114), the estimated average annual pricing for general liability insurance is around $1,500 per year. This was derived by looking at common factors such as number of employees, average payroll, and risk level/potential claims for businesses in this industry and mapping it to published insurance rates.

Estimated Pricing: $1,500

Property Insurance

“Property insurance provides an important way for direct health insurers to protect their physical assets and operations from financial losses. It can help cover costs from a variety of incidents and allow the business to continue serving customers. Some key benefits of property insurance for this industry include protecting investments in facilities and equipment, reimbursing repair or replacement costs after insured events, and providing liability coverage if visitors are injured on the property.”

Category List
Benefits
  • Covers damages or losses to buildings and equipment from covered events like fires, storms, and theft
  • Reimburses the cost to repair or replace damaged property after insured events
  • Protects investments in facilities and equipment needed to run business operations
  • Covers liability for injuries to others on your property
  • Allows the business to continue operating despite property damage from insured events
  • Insurance payouts can help pay employees during rebuilding/repair work after a loss
  • Protects financial stability and access to capital by preventing losses from wiping out business assets
  • Coverage for additional living expenses if insured property is uninhabitable after a loss
Use Cases
  • Protection against fire damage to office buildings and facilities
  • Coverage for water damage from burst pipes or other incidents
  • Replacement or repair costs for office equipment like computers if damaged
  • Liability protection if a visitor is injured on your property

Based on analyzing property insurance pricing data from leading insurance providers for businesses in the Direct Health and Medical Insurance Carriers industry (NAICS Code: 524114), the average annual property insurance premium is around $1.50 per $100 of insured property value. This price is calculated based on industry averages considering factors like business location, building age, security systems, claims history, and more.

Estimated Pricing: $1.50 per $100 of insured property value

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, protects companies in the direct health and medical insurance carriers industry from financial losses due to legal claims made by clients resulting from negligent acts, errors, or omissions related to their professional services. It provides coverage in cases of errors in underwriting policies, mistakes in claims processing, accidents in advising clients, privacy breaches, and non-compliance with regulations. The estimated average annual premium is around $12,500, with rates typically higher for this industry due to risks associated with errors and omissions in areas like medical insurance underwriting, claims processing, and other services.

Category List
Benefits
  • Protects against lawsuits from clients and patients if medical coverage is denied or incorrectly administered
  • Covers legal costs and fees if sued for errors in coverage determination, eligibility screening, claims processing, etc.
  • Provides protection if audited by government regulatory agencies like CMS or state insurance departments
  • Covers defense costs, judgments, and settlements if sued for privacy violations like HIPAA breaches
  • Indemnifies directors and officers if subject to a claim related to their management decisions and oversight of the company
  • Limits the financial impact of costly lawsuits by helping pay for legal costs, settlements, and potential monetary judgments
  • Mitigates financial risk of lawsuits and protects the company’s balance sheet
Use Cases
  • Coverage for errors and omissions in underwriting policies
  • Coverage for accidents or mistakes in claims processing
  • Coverage for mistakes in advising clients on coverage options
  • Coverage for privacy or data breaches involving client health information
  • Coverage for mistakes or negligence in complying with government regulations

Based on industry research and analysis of typical pricing factors such as premium rates, exposure levels, and risk profiles, the estimated average annual pricing for professional liability insurance for businesses in the Direct Health and Medical Insurance Carriers industry with NAICS Code 524114 is around $10,000-$15,000. Premium rates tend to be higher for this industry due to the risks associated with errors and omissions related to medical insurance underwriting, claims processing, and other services.

Estimated Pricing: $12,500

Workers’ Compensation Insurance

Workers’ compensation insurance is an essential employment benefit and legal requirement for most businesses. It provides protections for both employers and employees in the event of a work-related injury. Some key benefits of workers’ compensation insurance include covering medical expenses and lost wages for injured employees, preventing expensive lawsuits, and reducing risks for employers. Common use cases where it applies include providing coverage for on-the-job injuries, medical expenses, lost wages, legal liability, rehabilitation costs, and disability or death benefits. The estimated annual pricing for direct health and medical insurance carriers is typically between $150,000 to $250,000 based on factors like payroll size and industry risk levels.

Category List
Benefits
  • Covers medical expenses and lost wages for employees injured on the job
  • Required by law in all states except Texas to provide protection for employees
  • Prevents expensive lawsuits and ensures payment for workplace injuries
  • Promotes a positive work environment through fairness and care for injured employees
  • Reduces the risk of legal action for negligence from injured employees
  • Provides important legal protection for employers against costly lawsuits
Use Cases
  • Provide coverage for on-the-job injuries and medical expenses for employees
  • Cover lost wages if an employee is injured and unable to work
  • Cover legal liability if an employee is injured on the job
  • Cover rehabilitation costs if an injury requires physical therapy or occupational therapy
  • Cover disability or death benefits if an injury results in permanent disability or loss of life

Based on national average pricing data for workers’ compensation insurance, direct health and medical insurance carriers typically pay between $1.50 to $2.50 per $100 of payroll. Since the national average payroll for companies in NAICS 524114 is approximately $10 million, the estimated annual pricing would be between $150,000 to $250,000. This pricing is calculated based on industry risk factors, company size, experience rating modifiers, and other insurance rating factors.

Estimated Pricing: $150,000 – $250,000

Cyber Liability Insurance

As a direct health insurance carrier handling sensitive customer health information, cyber liability insurance provides important protections from the financial risks of a data breach or cyber attack. It can help cover costs related to notifying individuals, legal services, credit monitoring, network investigations and more. Some key uses cases where cyber liability insurance would apply include a data breach exposing protected health information (PHI) or personally identifiable information (PII), network security failures, ransomware attacks, third party vendor issues, and regulatory fines. Average annual premiums for cyber liability insurance for businesses in this industry are estimated around $5,000 due to the large amounts of sensitive personal data held and compliance with regulations like HIPAA.

Category List
Benefits
  • Covers costs associated with a data breach like credit monitoring, legal services, forensic investigations
  • Protects against lawsuits from customers whose sensitive information was compromised
  • Covers costs to notify individuals affected by a breach and comply with state breach notification laws
  • Covers theft of electronic data or funds from bank accounts or credit cards
  • Covers costs related to a network security failure or cyber extortion attempt
Use Cases
  • Data breach or cyber attack leading to loss of protected health information (PHI) or personally identifiable information (PII)
  • Network security failure exposing customer or client data
  • Ransomware attack locking data until ransom is paid
  • Third party vendor security failure exposing customer data
  • Regulatory fines and penalties from a data breach
  • Costs of breach response including credit monitoring, call centers, legal advice

Based on research, the average annual premium for cyber liability insurance for businesses in the direct health and medical insurance carriers industry (NAICS Code: 524114) is around $5,000. This pricing was derived based on factors such as the industry, annual revenue, number of records held, IT security practices, and claims history. As medical insurance carriers hold large amounts of sensitive personal data, they are at higher risk of cyber attacks and data breaches. The pricing also takes into account compliance with regulations such as HIPAA.

Estimated Pricing: $5,000

Directors And Officers Liability Insurance

Directors and officers liability insurance (D&O insurance) is an essential risk management tool for companies in the direct health and medical insurance carriers industry. D&O insurance protects company directors and officers from personal liability risks and covers legal defense costs if they are sued due to alleged wrongful acts or errors in performing their duties. D&O insurance also helps attract and retain talented leadership by reducing their risks of personal financial loss from costly litigation. Estimated pricing for D&O insurance in this industry ranges from $15,000 to $25,000 annually based on company size and risk profile.

Category List
Benefits
  • Protects directors and officers from personal liability if they are sued due to wrongful acts in their roles
  • Covers legal fees if the company or directors/officers are involved in a lawsuit
  • Covers settlement costs and punitive damages if the company or directors/officers are found liable in a lawsuit
  • Protects company assets from being seized to pay for litigation against directors and officers
  • Attracts qualified directors and officers by reducing their risks of personal financial loss
  • Maintains positive director and officer morale and retention by demonstrating the company cares for their well-being
Use Cases
  • Protect directors and officers from lawsuits alleging wrongful acts, errors, omissions or misleading statements in the performance of their duties on behalf of the company
  • Reimburse a company for indemnification payments and legal fees incurred in defending claims against directors and officers
  • Cover defense costs for directors and officers regardless of whether the allegations are ultimately proved or disproved
  • Protect the company from the financial burden of advancing legal defense costs to directors and officers before allegations are proven or disproven

Based on research, the average pricing for D&O insurance for businesses in the direct health and medical insurance carriers industry with NAICS code 524114 is around $15,000 – $25,000 per year. The pricing is derived from analyzing insurance quotes and policy data from top insurance carriers for this industry. Key factors that impact the pricing include the size of the company (annual revenue, number of employees), risk profile, claims history, coverage limits.

Estimated Pricing: $15,000 – $25,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important protection for businesses in the direct health and medical insurance carriers industry. EPLI helps cover costs of defending against and settling lawsuits related to discrimination, wrongful termination, and other legal employment issues that insurance carriers often face. EPLI can also provide services to help carriers stay compliant with regulations and avoid costly claims. Pricing for EPLI in this industry is typically $2.50-$5 per employee per year. Common uses of EPLI include coverage for wrongful termination lawsuits, discrimination claims, wage violation lawsuits, and failure to accommodate disability lawsuits – all relatively common risks for insurance carriers due to the nature of their work and regulations.

Category List
Benefits
  • Protection from lawsuits related to discrimination, harassment, wrongful termination, and other legal employment issues
  • Protection from costs of defending lawsuits, even if the claims are without merit
  • Reimbursement for settlements or potential judgments related to employment practices lawsuits
  • Access to experienced lawyers and consultants specializing in employment law defense
  • Help attracting and retaining employees by demonstrating commitment to employee care and risk management
  • Coverage for claims brought by current, former, or even prospective employees
  • Coverage extends to claims made against individual executives and managers, not just the company
  • EPLI policies often include services like hotlines for guidance on policies, handling situations, and remaining compliant
  • Protection of brand and reputation in the event of a costly lawsuit being publicized
  • Reduced stress for leadership knowing risks are covered appropriately
  • Discounted premiums available for organizations with comprehensive policies and training on employment best practices
Use Cases
  • Wrongful termination lawsuits
  • Discrimination or harassment claims
  • Wage and hour violation lawsuits
  • Failure to accommodate disabilities lawsuits
  • Privacy violations and related lawsuits

Based on industry analysis and average estimated risk factors, the pricing for EPLI insurance for businesses in the direct health and medical insurance carriers industry (NAICS 524114) is typically between $2.50 to $5.00 per employee per year, with a minimum premium of $2,500. The pricing is derived from normal risk factors such as number of employees, annual revenues, past claims experience, and types of employment practices covered.

Estimated Pricing: $2.50 – $5.00/employee/year, $2,500 minimum

Conclusion

Proper insurance planning is crucial for medical insurance carriers due to risks of costly lawsuits, data breaches, and regulatory claims. The recommended policies in this guide cover key exposures for injuries, property damage, professional errors, cyber incidents, employment issues, and protecting leadership. Consult an insurance broker to evaluate your specific risks and needs.

Frequently Asked Questions

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