When starting your family practice as a physician associate or nurse practitioner, professional liability insurance is one item of many on your checklist. That early, often split-second decision, matters when you need to make a claim. Most people have a “set it and forget it” attitude toward insurance. Choosing the right partner from the start and the best insurance package for your needs helps ensure your family practice is covered in case of any adverse events.
In this blog, we’ll explore the various types of liability coverage available and rate which insurance is necessary and which type is nice to have to protect your career and practice.
Types of liability coverage for your family practice
Malpractice insurance
In a study of over 40,000 physicians, 7.4% of all physicians had a malpractice claim in a 14-year time period. Even when a claim doesn’t lead to a payment to the claimant, resolving a malpractice is costly.
Professional liability insurance, commonly known as malpractice insurance, ensures your family medicine practice is protected from medical malpractice and negligence claims. The insurance is specific to healthcare professionals and covers legal fees, settlements and judgments associated with malpractice lawsuits.
In many states, medical malpractice insurance is mandatory for family medicine practices.
Scope of professional liability insurance coverage:
- Patient claims of professional negligence, errors and omissions
- Misdiagnosis, treatment errors, and other mistakes related to your professional duties as a PA or NP
MUST HAVE: This coverage is crucial for PAs and NPs, who often work autonomously and have a broad scope of practice, making them susceptible to such claims.
General liability insurance
General liability insurance covers non-medical claims that may occur as a business owner, such as bodily injury or property damage on your practice premises. For example, if a patient slips and falls in your clinic, this insurance would cover the legal costs and any settlements.
Scope of general liability insurance coverage:
- Bodily injury to others
- Property damage
- Sexual harassment
MUST HAVE: This type of insurance is essential for protecting the physical location of your family medicine practice and ensuring that accidents unrelated to medical treatment do not financially burden you.
Business owner’s policy
If you own or rent a space for a brick-and-mortar family medicine practice, a business owner’s policy (BOP) can help you save money by bundling multiple policies. A BOP includes general liability insurance and commercial property insurance.
BOPs are flexible, so you can bundle it with other policies you need for your private practice. Some examples include the following:
- Business interruption insurance protects your practice from financial losses resulting from a temporary suspension or interruption of operations caused by a natural disaster.
- Data breach insurance: Cybersecurity insurance protects you against financial losses and liabilities arising from cyber attacks, data breaches or other cybersecurity incidents. As a private practice, storing patient data, email addresses and credit card information puts you at risk for a cyber attack.
- Business renter’s insurance: Covers your rented space from a fire, vandalism or severe damage.
- Property insurance: If you own your medical office, property insurance protects your physical assets against damage or loss caused by covered events. This includes the building, equipment, furniture and supplies. This helps you recover financially and rebuild in a covered incident.
Cyber liability insurance
If you don’t have a BOP that includes cyber liability insurance, you’ll want to be sure to get cyber insurance coverage.
The HHS Office for Civil Rights (OCR) investigated approximately 900 breaches on healthcare companies of all sizes in the first half of 2024 alone.
The increasing reliance on digital health records and telemedicine makes cyber liability insurance indispensable for every family medicine practice entering patient data online.
Cyber security insurance ensures that a cyber breach does not mean the end of your business. A good carrier will also give you access to experienced vendors to support you throughout the notification and recovery process. These include legal counsel, forensics experts and even negotiators in the case of a significant ransomware attack.
MUST HAVE: Cyber insurance protects against data breaches and cyberattacks, which can result in significant financial losses and legal liabilities.
Insurance to cover your employees
If you start as a solo provider, there’s no need for employee liability insurance. As soon as you start thinking about adding employees, consider the following policies –– some of which are mandatory
Employee health insurance
Whether you are a solo provider or have multiple employees, employee health insurance protects you and your employees in the event of illness or injury.
NICE TO HAVE, EVEN FOR A SMALL TEAM: Good employee health insurance helps attract and retain talented staff. Many states require businesses with 50+ employees to provide health insurance coverage as part of their benefits package.
Workers’ compensation insurance
Workers’ compensation insurance covers medical costs, rehabilitation expenses and lost wages for employees injured or ill while on the job. It also provides financial protection if an employee sues you due to an injury or illness at your practice.
MUST HAVE: Workers’ compensation is required in almost every state. Failure to comply with the regulations can result in legal action against your practice.
Disability insurance
Disability insurance provides income replacement to you or your employee if you cannot work due to a medical condition or injury. Disability insurance helps pay for ongoing living expenses such as rent or mortgage payments, utilities, food and health care costs.
When choosing disability insurance, it’s important to consider the type of coverage you need and the benefits you want to receive. Short-term disability (STD) covers up to two years in case of illness or injury. Long-term disability (LTD) offers protection for five years or more and can provide additional benefits such as rehabilitation services. Be sure your policy covers mental and physical illnesses or injuries, so you’re covered no matter what happens.
NICE TO HAVE: A robust benefits package is important for attracting the best employees. As the owner, disability insurance can keep you financially stable if you can’t work.
Employer’s liability insurance
Employer’s liability insurance covers claims arising from employment-related issues such as wrongful termination, discrimination and harassment.
NICE TO HAVE: In a healthcare setting, where teamwork and staff interactions are critical, this coverage helps protect both the employer and employees from workplace disputes.
Practice overhead insurance
This type of insurance coverage protects your family medicine practice from financial losses in the event of a disability or injury to the practice owner or a key employee. It covers the practice expenses while you or a key employee can’t work.
It’s important to coordinate practice overhead insurance with any individual disability insurance policy. Individual disability insurance covers the personal income of the insured, while practice overhead insurance covers business expenses. Coordinating the two ensures your personal and business expenses are adequately protected in the event of a disability.
NICE TO HAVE: Practice overhead insurance could make the difference between staying in business during an illness or accident and closing the practice.
Comprehensive liability coverage is a necessity and a vital component of risk management for family practice PAs and NPs. Your insurance broker can help you determine which insurance is right for you and what you should add as your practice grows.
