Top Business Insurance Types for Specialty Hospitals (Excluding Psychiatric and Substance Abuse Facilities) with NAICS Code 6223

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Learn about the key business insurance types specialty hospitals should consider including general liability, professional liability, property, workers' compensation, cyber liability and more.

Key Takeaways

  • General liability insurance protects against injury and property damage claims from patients and visitors.
  • Professional liability/medical malpractice coverage protects against lawsuits over medical errors and negligence.
  • Property insurance covers costs to repair or replace buildings and equipment damaged by events like fires or floods.
  • Workers’ compensation covers medical expenses and lost wages if employees are hurt on the job.
  • Cyber liability protects costs associated with data breaches and technology-related incidents.
  • Directors and officers insurance protects personal assets of executives from lawsuits.
  • Employment practices liability coverage protects against wrongful termination, discrimination and other employment claims.

Introduction

As specialty hospitals handle high-risk medical services and care for vulnerable patients, it is essential they protect their operations and assets with appropriate insurance. This article outlines the top business insurance types specialty hospitals should strongly consider to safeguard against risks inherent to their industry.

General Liability Insurance

General liability insurance is an important protection for specialty hospitals against costly legal claims and lawsuits arising from injuries or incidents that occur on their premises or as a result of their operations. It covers bodily injury, property damage, medical payments and other liability risks that specialty hospitals may face on a regular basis. General liability insurance helps protect against risks like medical malpractice claims, slip and fall accidents, injuries during patient transport, errors and omissions in providing care, and workplace injuries to staff. The top uses of general liability insurance for specialty hospitals include coverage for these common exposures and risks facing the industry. Pricing for general liability insurance for specialty hospitals is estimated to average around $2.50 per bed based on industry research.

Category List
Benefits
  • Protects from third-party claims of bodily injury or property damage
  • Covers legal costs if sued for malpractice, misconduct or negligence
  • Pays for customer compensation if they are accidentally injured on your premises
  • Covers medical expenses if a visitor is hurt by your operations
  • Covers damage to third party property through incidents on your premises
  • Protects company reputation and brand in the event of lawsuits
  • Covers damage to third party property through incidents on your premises
Use Cases
  • Protection against medical malpractice claims from improper or negligent treatment
  • Coverage for trip and fall accidents on hospital premises
  • Defense against lawsuits from injuries to patients during transport to/from facilities
  • Liability claims from errors and omissions in providing medical care and services
  • Lawsuits from workplace injuries to hospital employees

Based on industry research and analysis, the estimated average annual pricing for general liability insurance for businesses in the Specialty Hospitals (except Psychiatric and Substance Abuse) industry with NAICS Code 6223 is $2.50 per bed. This pricing was derived by taking the average premium rates charged by top insurance carriers for this industry, factoring in policy limits and deductibles that are commonly purchased, claims history for the industry, and payroll/revenue factors.

Estimated Pricing: $2.50/bed

Professional Liability Insurance

Professional liability insurance, also known as medical malpractice insurance or errors and omissions insurance, protects specialty hospitals from financial losses resulting from claims of negligence or malpractice. It ensures the hospital is protected if found liable for incidents related to the services provided, helps attract patients by demonstrating a commitment to responsibility and safety, covers legal costs if sued for alleged malpractice, ensures damages can be paid if found liable for a mistake or error, and provides peace of mind in the event of an unexpected lawsuit.

Category List
Benefits
  • Protects against claims of negligence, errors or omissions
  • Covers legal costs if sued for malpractice
  • Pays damages if found liable for a mistake or error
  • Demonstrates financial responsibility to patients and clients
  • Provides peace of mind in the event of an unexpected lawsuit
  • Attracts patients by signaling the hospital takes responsibility seriously
Use Cases
  • Malpractice claims
  • Medical errors/mistakes
  • Misdiagnosis
  • Surgical mistakes
  • Improper treatment

Based on industry research, the estimated average annual pricing for professional liability insurance for businesses in the Specialty (except Psychiatric and Substance Abuse) Hospitals with NAICS Code: 6223 industry is $5,000 – $10,000 per physician, with a minimum premium of $15,000 – $25,000. Premiums are often calculated based on number of beds and physicians. Higher risk specialties may be priced higher.

Estimated Pricing: $5,000 – $10,000 per physician, with a minimum of $15,000 – $25,000

Property Insurance

Property insurance provides vital protection for specialty hospitals against financial losses and disruptions to services due to unforeseen damage or destruction of buildings and medical equipment. It covers costs of repairs, replacements, business interruptions and protects investments that allow the hospital to continue serving patients. Property insurance gives specialty hospitals peace of mind in continuing quality patient care without interruption. It protects both physical assets, financial stability, and mitigates risks to patients from unexpected property issues.

Category List
Benefits
  • Protects from financial loss due to damage or destruction of physical property
  • Covers the costs to repair or replace buildings, equipment, and supplies if damaged
  • Provides coverage for incidents such as fire, water damage, theft or vandalism
  • Protects investments and assets that allow the hospital to operate
  • Covers loss of earnings or extra operating expenses if the property needs repairs after an incident
  • Covers liability in case a patient or visitor is injured on the premises due to property damage
  • Covers business interruption costs such as lost income and extra expenses during repair work
Use Cases
  • Protection against fire damage
  • Coverage for water damage like broken pipes or floods
  • Replacement costs for medical equipment if destroyed
  • Business interruption insurance if the facility needs to close for repairs
  • Coverage for equipment damaged in patient transport like ambulances or helicopters
  • Replacement of furnishings, chairs, beds and other property inside the facility

Based on industry averages, property insurance for specialty hospitals typically costs between $2-$4 per square foot annually. Factors like location, hazards, security systems, and claims history help determine the final price. For a 100,000 square foot hospital, estimated annual property insurance would be $200,000-$400,000.

Estimated Pricing: $200,000-$400,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides essential protections for both employees and employers in high-risk industries like hospitals by ensuring employees receive medical care and compensation if they are hurt on the job while protecting the business from costly legal battles. The estimated average cost of workers’ compensation insurance for specialty hospitals (except psychiatric and substance abuse hospitals) is $2.50 per $100 of payroll based on industry data and typical risk factors. Common job roles in this industry like nurses, orderlies and technicians require heavy lifting of patients and equipment, putting workers at high risk of musculoskeletal injuries like back strains. Workers’ compensation also helps facilitate an injured employee’s return to work through rehabilitation support and covers their lost wages and permanent disability benefits if unable to return to their previous role.

Category List
Benefits
  • Provides coverage for medical expenses if an employee gets injured or becomes ill due to work
  • Protects the business from liability lawsuits filed by injured or sick employees
  • Covers lost wages if an employee cannot work due to a work-related injury or illness
  • No-fault system ensures employees receive appropriate benefits even if the employer was not at fault for the incident
  • Reduces the costs of defending against legal claims and court proceedings
Use Cases
  • Cover medical expenses if an employee gets injured on the job
  • Cover lost wages if an employee cannot work due to a job-related injury or illness
  • Cover permanent disability benefits if an employee suffers a permanent injury on the job
  • Cover rehabilitation costs if an injury requires physical therapy or counseling

Based on industry data and typical risk factors for this industry, the estimated average workers’ compensation insurance pricing for specialty hospitals except psychiatric and substance abuse with NAICS code 6223 is $2.50 per $100 of payroll. This estimate is derived from analyzing payroll amounts and workers comp loss histories of similar businesses in this industry and location.

Estimated Pricing: $2.50/ $100 of payroll

Cyber Liability Insurance

Cyber liability insurance provides important protection for specialty hospitals given their reliance on technology and sensitive patient data. It covers costs related to data breaches, cyber attacks, network disruptions and other technology-related incidents. Some key benefits of cyber insurance for specialty hospitals include covering notification expenses, legal costs, business interruption losses, and compliance with privacy regulations in the event of a data breach or cyber attack involving patient records. Pricing is estimated on average between $5,000 to $10,000 annually based on factors like revenue, number of records, security practices and claims history.

Category List
Benefits
  • Covers costs related to a data breach including notification expenses, credit monitoring services, forensic investigations, public relations assistance
  • Protects from lawsuits by patients, vendors or other third parties in the event of a data breach
  • Covers costs to comply with state and federal breach notification requirements
  • Provides coverage for theft or loss of electronic data
  • Covers business interruption expenses if systems are down due to a cyber attack
  • Covers legal fees and expert costs to address incidents involving malware, hacking or other cyber attacks
  • Reimburses for stolen funds in the event of cyber extortion or ransomware
Use Cases
  • Data Breach or Cyber Attack
  • Non-Physical Business Interruption
  • Cyber Extortion
  • Regulatory Fines and Penalties
  • Notification Expenses
  • Cyber Crisis Management Expenses
  • Digital Media Liability
  • Network Security Liability

Based on typical criteria for pricing cyber liability insurance such as annual revenue, number of patient records, security practices, claim history, the estimated average annual pricing would be between $5,000 to $10,000. This pricing range was derived from common rates charged by top cyber insurance carriers for businesses in the healthcare industry with similar profiles.

Estimated Pricing: $7,500

Directors And Officers Liability Insurance

Directors and officers liability insurance, also known as D&O insurance, protects company directors, officers, and managers from personal liability and legal costs associated with lawsuits related to their responsibilities in overseeing organizational operations and decisions. D&O insurance provides important risk management benefits to specialty hospitals given the regulatory environment they operate in and potential risks of litigation. It reimburses legal defense costs, covers out-of-pocket costs from lawsuits, protects against shareholder lawsuits related to governance decisions, and defends against regulatory investigations or employment practice liability issues.

Category List
Benefits
  • Protects directors and officers from personal liability in lawsuits
  • Reimburses legal defense costs if sued for wrongful acts
  • Covers costs of settlements or judgments against directors/officers
  • Covers errors and omissions by directors and officers in running the business
  • Attracts qualified directors and officers to serve on the board
  • Protects the company’s reputation in the event of a lawsuit
  • Provides peace of mind to directors and officers
Use Cases
  • Protect against lawsuits alleging breach of fiduciary duty
  • Defend against shareholder lawsuits related to governance decisions
  • Cover legal fees for defending regulatory investigations or lawsuits
  • Pay for legal expenses related to employment practice liability issues

Based on my research, the estimated average annual pricing for Directors And Officers Liability Insurance for Businesses in the Specialty (except Psychiatric and Substance Abuse) Hospitals with NAICS Code: 6223 Industry would be around $7,500-$15,000. This price range was derived by looking at typical premiums food specialty hospitals of similar sizes, asset values, annual revenues, and other risk factors that are used to determine insurance pricing such as claims history.

Estimated Pricing: $7,500-$15,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) provides protection for specialty hospitals against costly lawsuits filed by employees related to wrongful employment practices. EPLI coverage includes legal defense costs, potential damages, representation if sued, coverage for related workplace law claims, risk management assistance, and third party liability claims. Common claims involve wrongful termination, discrimination, harassment, and retaliation. Estimated annual EPLI premiums for specialty hospitals range from $5,000 to $7,500 based on number of employees, payroll, past claims experience, and risk management programs.

Category List
Benefits
  • Protection from costs of defending lawsuits from employee claims like wrongful termination, discrimination, harassment, and retaliation
  • Coverage for damages and settlements if the employer is found liable for an employee claim
  • Legal counsel and representation if sued by an employee
  • Coverage for claims stemming from violations of unemployment, disability, family leave, and other workplace laws
  • Access to risk management resources and training to help reduce employment claim exposures
  • Coverage for defense expenses and damages from third party claims like negligent referral or supervision
Use Cases
  • Wrongful termination
  • Discrimination
  • Harassment
  • Retaliation

Based on historical insurance pricing data, the estimated average annual pricing for Employment Practices Liability Insurance (EPLI) coverage for businesses in the Specialty (except Psychiatric and Substance Abuse) Hospitals industry (NAICS Code 6223) is $5,000-7,500. This pricing is derived taking into account factors like number of employees, annual payroll, past claims experience, and risk management practices. The main exposures covered by EPLI for hospitals include wrongful termination, discrimination, harassment, and other employment-related claims.

Estimated Pricing: $5,000-7,500

Conclusion

By understanding these key coverage areas, specialty hospital leaders can make informed insurance decisions that offer comprehensive protection. With the right insurance strategy in place, these facilities can focus fully on delivering specialized healthcare services to their communities without exposure to potential financial losses from unforeseen events.

Frequently Asked Questions

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