Doctors: These are the Policies to Consider

By: Jaime Chafey González, Insurance Producer at Popular Risk Services

A doctor’s or specialist’s academic and professional preparation is extensive, so much so that it can last nine to twelve years. Once they enter the workforce, doctors must prioritize financial planning ² to design short and long-term strategies, both at a personal and business level. An essential part of financial planning includes developing a personalized insurance³ program to help protect their medical practice as well as their assets. This becomes even more relevant when a doctor sets up their medical office or private practice.

There are specific insurance ⁴ policies that healthcare professionals should consider for their business, such as:

• Property insurance: To secure the structure and any improvements made to the office or workplace.
• Contents and equipment policies: To protect medical and electronic equipment, furniture, and everything inside the structure.
• Public liability insurance: To protect against claims for actions that are not related to medical treatment.
• Cybersecurity policies: To safeguard patient data and records.
• Medical malpractice policy

What is medical malpractice?

Medical malpractice, also known as professional liability, is insurance that offers coverage against claims for damages resulting from actions, errors, or omissions in a professional health practice.

Within the different medical malpractice policies and insurance limits, it is common to see policies with basic coverage required by law, such as the $100,000/$300,000 policy. For example, if a doctor has three claims of $100,000 in one year, the policy covers all three for $100,000. But, if that professional receives a fourth claim of $100,000 during the same year, they will have to respond with their own assets since the insurance limit has been reached. However, it is important to point out that there are policies with higher limits, offering coverage of up to $1 million per occurrence and a maximum annual limit of $3 million.

One of the most important aspects of these policies is the retroactive date or the date it was first purchased. As the years go by and policies are renewed, health professionals must verify that the retroactive date is honored. This ensures that they will be protected against any claims after purchasing the policy.

Another consideration is Tail Coverage, a mechanism that extends the period for reporting a medical malpractice claim.

Tail coverage becomes more significant on two occasions. When a health professional retires, they usually make a payment equal to 200% of the last premium paid. This provides protection during retirement against any claims that arise from a past incident. In addition, it extends the same benefit to heirs.

This tail coverage is also relevant when a physician changes specialties. In that case, the professional must inform and submit the change to their insurance company to obtain the appropriate protections for their professional practice.

The insurance company: your steadfast ally

If a health professional is aware of any error or omission that could result in a patient’s potential claim involving their medical services, they must notify the incident to their insurer. That way the healthcare provider will avoid having their coverage negatively impacted.

It is a common believe that if a health professional files a claim with the insurance company, this leads to a premium increase or the cancellation of their policy. However, contrary to perception, maintaining open communication with your insurance producer and insurance company will help you be better prepared for managing your risk exposures and claims.

It is important for a doctor to maintain communication with their insurance producer to get guidance on the policy’s terms and conditions.

Other protections

On a personal level, it is important to include life insurance in your financial planning. This coverage is usually acquired when starting a family and having children. However, the earlier in your life you purchase a policy, the more cost-efficient it will be.

For health professionals, life insurance can provide great benefits:

1. It secures your life and provides a benefit to your family or any dependent. This benefit is tax-free.
2. There are life insurance policies that can serve as a complement to a retirement plan. Once you retire, you can distribute this money in addition to any income from investments and/or Social Security.
3. There are life policies that provide protection against claims that may threaten your capital.

Disability insurance is another protection that many people underestimate. It should also be included in your financial planning. This policy can pay you up to 60% of your income and is usually in force until age 65.

The key to the disability policy is that a professional can qualify for this benefit when they are unable to complete the specific tasks associated with their profession (be it due to a mild tremor in an arm or an illness such as cancer, Alzheimer’s, or Parkinson’s).

At Popular One¹, our team of professionals is ready to guide and assist you in managing your finances², investments³, risks, or professional insurance⁴ for your business or health practice. Contact your Popular One team or your Popular Risk Services insurance producer today at PRSsales@popular.com or by calling 787-672-9483 Monday through Friday form 8:00 a.m. to 5:00 p.m.