Chapter 3: How to Fill the Gaps Left by Standard Insurance Policies
Part 1: Why Starting and Stopping Malpractice Insurance Never Pays Off
For healthcare business owners (and especially sole proprietors), money is tight. You have a business to maintain, patients to treat, and an office to run. If you're looking for ways to save money, it can be tempting to only purchase a policy when you "need" it (such as when a new contract or lease requires it) and drop it when you don't.
But if you "don't have enough money" for insurance, you definitely don't have enough money to combat a lawsuit — even if the charges against you are ultimately dropped. Simply hiring a lawyer can cost thousands of dollars. Plus, when you're sued, there's a very real risk that you'll be liable for wrongdoing. For malpractice suits, you could face a settlement or judgment with a million-dollar price tag.
We've already examined how Malpractice Insurance works on a claims-made basis, which means the same policy must be in place when a covered incident occurs and when the claim for the incident is filed. If you don't have the appropriate nose or tail coverages in place to bridge the transition between Professional Liability policies, you could be left handling the high cost of a malpractice suit on your own.
Next: HITECH Act: What Allied Health Professionals Need to Know