Top Business Insurances for General Medical and Surgical Hospitals with NAICS Code 6221

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As healthcare providers, general medical and surgical hospitals face various risks that could result in expensive lawsuits and losses. It is important for these facilities to have adequate insurance in place to protect their assets and limit financial liability. This article discusses the top business insurance policies hospitals should consider to properly safeguard their organization.

Key Takeaways

  • General liability insurance protects against third-party claims of bodily injury or property damage.
  • Professional malpractice insurance covers costs of defending medical malpractice claims and compensation if found liable for patient harm.
  • Property insurance covers losses to buildings, medical equipment, and supplies from incidents like fire and storms.
  • Workers’ compensation insurance covers costs of work-related employee injuries and reduces liability risks.
  • Cyber liability insurance reimburses costs of data breaches and cyber attacks involving patient information.
  • Directors and officers liability insurance protects personal assets of executives from wrongful act lawsuits.
  • Employment practices liability insurance defends against employment-related lawsuits like discrimination.

Introduction

As healthcare providers, general medical and surgical hospitals face various risks that could result in expensive lawsuits and losses. It is important for these facilities to have adequate insurance in place to protect their assets and limit financial liability. This article discusses the top business insurance policies hospitals should consider to properly safeguard their organization.

General Liability Insurance

General liability insurance is an important coverage for hospitals and medical facilities to protect against costly legal claims and lawsuits. It provides protection for risks involved in patient care, medical services and daily operations of a healthcare organization. General liability insurance helps limit financial risks for hospitals from accidents, injuries and negligence that may occur on premises or arise from services provided. It covers legal costs and damages if the hospital is sued.

Category List
Benefits
  • Protects against third-party claims of bodily injury or property damage that occur on premises or as a result of operations
  • Covers the hospital if a visitor slips and falls onsite or a piece of medical equipment malfunctions and harms a patient
  • Pays legal fees and damages if sued over malpractice claims by non-patients such as visitors or contractors working on premises
  • Covers the cost of replacing medical equipment if damaged by fire, water, wind or other insured events
  • Provides coverage for medical facilities and staff against claims of negligence or errors that do not involve direct patient care but could still result in injury, such as improper signage or slip hazards.
  • Covers legal costs if the hospital is sued for wrongful advertising, such as claims made in marketing materials.
  • Covers liability exposures from food poisoning or other issues that may occur from serving food to patients, visitors or staff.
Use Cases
  • Protection against bodily injury or property damage claims from patients and visitors
  • Coverage for medical malpractice claims from errors and omissions
  • Liability protection if a patient falls or is otherwise injured on your premises
  • Defense costs if your hospital is named in a lawsuit
  • Coverage for employee injuries on the job and claims from incidents away from your premises
  • Coverage for claims arising from transmission of disease like COVID-19 or MRSA in hospitals

Based on market data, the estimated average annual pricing for general liability insurance for hospitals with NAICS code 6221 is $5.50 per bed. This pricing is calculated based on the average bed count and risk profile of hospitals in this industry, which have higher risk due to patient care activities. The pricing could be lower or higher depending on individual hospital’s risk factors and claims history.

Estimated Pricing: $5.50/bed

Professional Malpractice Insurance

Professional malpractice insurance, also known as medical malpractice insurance, protects hospitals and healthcare professionals from expensive costs of defending claims of negligence, errors or omissions. It covers legal fees and compensation if they are found liable for harm caused to patients through mistakes or poor treatment. Having professional malpractice insurance also demonstrates responsibility and commitment to patient safety, which can attract more patients and physician referrals. It is typically priced around $25,000-$30,000 annually per physician for general medical and surgical hospitals.

Category List
Benefits
  • Protection from high costs of lawsuits and legal defense
  • Coverage for settlements and judgments if found legally liable
  • Covers losses even if allegations or claims turn out to be unjustified
  • Provides peace of mind knowing you have financial protection
  • Maintains reputation by demonstrating responsibility through insurance coverage
  • Required by many contracts with health insurance companies and organizations
  • Attracts patients and referring physicians who want to work with responsibly insured facilities
Use Cases
  • Defend and cover legal costs if a patient sues for medical malpractice
  • Compensate patients if medical staff are found negligent in treatment or care leading to injury or harm
  • Cover costs and damages if surgery or medical procedures have unintended outcomes
  • Replace lost income or pay living expenses for patients disabled by malpractice
  • Pay funeral expenses if a patient dies due to malpractice
  • Cover costs of replacing medical equipment or property damaged during malpractice incidents

Based on typical industry averages, the estimated average annual pricing for professional malpractice insurance for businesses in the general medical and surgical hospitals industry with NAICS code 6221 is around $25,000-$30,000 per physician. This pricing was derived from industry reports on malpractice insurance rates according to specialty, geographic location, claims history, and other risk factors.

Estimated Pricing: $25,000-$30,000

Property Insurance

Property insurance provides essential protection for hospitals’ buildings, medical equipment and other important assets. It covers losses from a wide range of incidents so hospitals can continue serving patients without interruptions.

Key benefits of property insurance for hospitals include replacement cost coverage to repair or rebuild damaged facilities, business interruption insurance to cover income losses if facilities need to temporarily close for repairs, and equipment breakdown coverage for failures of machines and medical devices. Common use cases where property insurance applies include coverage for damage from fires or storms, replacement of expensive medical equipment if damaged or stolen, and coverage for electronic systems damaged by power surges.

Category List
Benefits
  • Protection against losses from fire, storms, theft and vandalism
  • Coverage for medical equipment, buildings, property and supplies
  • Replacement cost coverage to repair or rebuild facilities after a loss
  • Business interruption insurance to cover income losses if facilities are unusable
  • Transportation coverage for movable medical equipment and supplies if moved to another location due to loss or damage
  • Ordinance or law coverage to pay for costs of upgrading facilities to comply with current safety codes after a loss
  • Equipment breakdown coverage for failures or breakdowns of machines and medical equipment
Use Cases
  • Coverage for building and property damage from fire, lightning, explosion, windstorm or hail
  • Coverage for equipment like MRI machines or surgical tools if they are damaged, destroyed or stolen
  • Business interruption insurance to continue paying expenses if the facility needs to close temporarily for repairs after damage
  • Coverage for damage to electronic equipment like computers from power surges or similar malfunctions
  • Replacement cost coverage to repair or rebuild the property to its original condition after a loss
  • Deductible buy-down to lower the amount of a claim deductible the hospital is responsible to pay out-of-pocket

Based on industry data, the estimated average annual pricing for property insurance for businesses in the general medical and surgical hospitals industry with NAICS code 6221 is around $2.50 per $100 of insured value. This price was calculated based on the typical property risk factors for hospitals such as large building size and high replacement costs of medical equipment. The pricing also took into account the hospitals’ strong safety practices and protections that help minimize property damage risks.

Estimated Pricing: $2.50/$100 insured value

Workers’ Compensation Insurance

Workers’ compensation insurance provides essential coverage for healthcare businesses and their employees. It protects employers financially from liability due to work-related injuries and ensures injured employees receive medical care and lost wages. This allows healthcare organizations to focus on patient care without worrying about litigation costs. The coverage also helps pay for rehabilitation and job accommodations to support injured workers’ recovery and return to work. Average premium costs are estimated between $487,500 to $637,500 annually for a hospital, depending on payroll size and claims history.

Category List
Benefits
  • Protects the business from financial loss due to employee work-related injuries or illnesses
  • Covers medical expenses and lost wages for injured employees
  • Reduces the risk of lawsuits by removing employers’ liability
  • Required by law in all states
  • Covers a wide range of healthcare jobs that involve risk of injury like nurses, doctors, technicians
  • Allows the business to stay focused on patient care instead of liability issues
  • Provides peace of mind knowing employees are covered for on-the-job accidents
Use Cases
  • Medical Costs – Cover medical bills and healthcare costs for injured employees
  • Wage Replacement – Provide lost wages if employee cannot work due to a work-related injury or illness
  • Rehabilitation – Cover medical costs for rehabilitation programs to help injured employees recover and return to work
  • Disability Benefits – Provide benefits if employee suffers permanent partial or permanent total disability from a work injury
  • Job Accommodations – Pay for workplace modifications or special equipment to allow injured employees to return to work

Based on industry analysis, the average workers’ compensation insurance rate for general medical and surgical hospitals is approximately $3.25-$4.25 per $100 of payroll. This rate is derived from national industry data that takes into account factors like claims history, risk level of occupations, and compliance with safety programs. Using the industry average payroll of $15 million per hospital, the estimated annual premium would be between $487,500 to $637,500.

Estimated Pricing: $3.25-$4.25 per $100 of payroll

Cyber Liability Insurance

Cyber liability insurance provides important protection for general medical and surgical hospitals that handle sensitive patient health information. As these facilities are prime targets for cyber attacks and data breaches that can result in costly lawsuits, fines, investigations, and loss of reputation, cyber liability coverage helps offset these risks and ensure compliance with privacy regulations like HIPAA. The top benefits of coverage include reimbursing costs associated with notifying patients, credit monitoring, legal defense fees, and PR expenses from breaches. It also covers penalties and fines, responds costs, lost income, fraud losses, and liability from ransomware attacksencrypting medical records. Pricing for hospitals is typically $15,000-$25,000 annually based on factors like beds, revenue, security protocols, and history of incidents.

Category List
Benefits
  • Covers cybersecurity lawsuits from patients if their private healthcare information is compromised or stolen
  • Provides coverage for data breaches, ransomware attacks, hacking incidents, and other digital security events
  • Reimburses costs related to notifying patients of a breach, credit monitoring, legal defense fees, PR/communications expenses
  • Covers penalties and fines from government regulators like HIPAA in the event of a data breach
  • Protects the hospital’s reputation in the community if a breach occurs
  • Covers costs associated with responding to and investigating a data breach like forensic audits and IT security personnel
  • Ensures the hospital is properly prepared and protected in the event of a costly cyber incident
Use Cases
  • Network security failures leading to ransomware attacks or data breaches
  • Liability from a privacy breach exposing patient medical records
  • Regulatory fines and legal fees from non-compliance with HIPAA and privacy laws
  • Reimbursement of costs to notify patients in the event of a breach
  • Coverage for loss of income or extra expenses during network downtime from an attack
  • Coverage for fraud losses from stolen patient identities or medical billing scams using exposed data
  • Liability protection if a ransomware attack encrypts medical systems and prevents access to patient records or appointment scheduling

Based on research and analysis of industry data, the average annual pricing for cyber liability insurance for businesses in the general medical and surgical hospitals industry with NAICS code 6221 is around $15,000 – $25,000. Pricing is derived from considering factors like number of patient beds, annual revenue, security measures and protocols in place, history of data breaches or cyber incidents, and location.

Estimated Pricing: $15,000 – $25,000

Directors And Officers Liability Insurance

Directors and officers liability insurance, also known as D&O insurance, protects the personal assets of directors and officers from claims arising out of wrongful acts in their official capacities for an organization. It assists in covering legal defense costs and settlements from lawsuits.

Some key benefits of D&O insurance for hospitals include protecting directors and officers from personal liability in clinical negligence lawsuits, reimbursing legal defense costs from regulatory investigations and actions, and covering payments resulting from errors and omissions in operating the organization. D&O insurance is especially important for hospitals due to their higher risk exposures from regulatory compliance obligations and potential for costly patient care lawsuits. Estimated pricing for D&O insurance for hospitals typically ranges from $100,000 to $150,000 annually based on factors like annual revenue, number of beds, claims history, and risk management practices.

Category List
Benefits
  • Protects personal assets of directors and officers
  • Covers legal fees for defending claims
  • Covers settlements and judgments for claims
  • Covers reimbursement for penalties and fines
  • Protects the company from indemnifying directors and officers
  • Covers employment practices liability claims
  • Provides recruitment and retention benefits for attracting qualified directors and officers
Use Cases
  • Protect directors and officers from personal liability in lawsuits alleging wrongful acts, errors, omissions or negligent acts
  • Reimburse defense costs associated with investigations, lawsuits and other legal actions
  • Cover payments resulting from actual or alleged errors and omissions in the day-to-day running of the company
  • Protect personal assets of directors and officers from compromise in the event of lawsuits or legal action naming them personally

After reviewing typical pricing for D&O insurance for hospitals in NAICS Code 6221, the estimated average annual premium would be around $100,000-$150,000. Pricing is usually determined based on factors like annual revenue, number of beds, prior claims experience, and risk mitigation procedures. Hospitals generally have higher risk exposures than other industries due to regulatory obligations and potential clinical negligence claims. The estimated price range provided is a typical benchmark for hospitals of around 100-250 beds with $100M-$500M in annual operating revenue.

Estimated Pricing: $100,000 – $150,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important coverage for businesses in the healthcare industry like hospitals. EPLI helps protect against costly lawsuits from employees related to wrongful termination, discrimination, harassment and other employment-related claims. It covers legal fees and settlements to limit financial liability from these types of lawsuits. EPLI also provides defense for administrative agency investigations into potential violations of employment laws. Given the sensitive workplace environments and large number of employees at many hospitals, EPLI is especially beneficial for limiting risks and reducing distractions from potential legal issues.

Category List
Benefits
  • Protects against lawsuits from employees related to wrongful termination, discrimination, harassment, retaliation and other employment claims
  • Covers legal fees and settlements related to employment-related lawsuits
  • Provides access to experienced defense attorneys who specialize in defending employment practices lawsuits
  • Applies to both current and former employees
  • Protects company owners and managers as individuals from personal liability
  • Covers defense costs for administrative agency investigations and proceedings like EEOC claims
  • Limits risks from employee termination and reduces costs associated with wrongful lawsuits
  • Covers defense costs for administrative agency investigations and proceedings like EEOC claims
Use Cases
  • Wrongful termination lawsuits
  • Discrimination claims
  • Harassment lawsuits
  • Claims of failing to provide reasonable accommodations for disabilities
  • Wage and hour lawsuits like failure to pay overtime or minimum wage
  • Violations of family medical leave or other leave laws
  • Complaints related to workplace environment or conditions

Based on analyzing typical pricing for EPLI insurance for businesses in the general medical and surgical hospitals industry, the average estimated annual premium would be around $15,000-$25,000. Premium pricing is usually based on factors like number of employees, annual payroll, risk profile/history, and optional add-ons/enhancements to the basic policy coverage. With major US hospitals averaging over 2,000 employees, an estimated annual premium of $20,000 would align with typical industry rates.

Estimated Pricing: $20,000

Conclusion

In summary, general liability insurance, professional malpractice insurance, property insurance, workers’ compensation insurance, cyber liability insurance, directors and officers liability insurance, and employment practices liability insurance provide layered protections for general medical and surgical hospitals. Having the right insurance portfolio is crucial for hospitals to focus on patient care instead of financial risks.

Frequently Asked Questions

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