Do you need to cover your Professional Entity against potential malpractice lawsuits?
It is important for physicians and practices to understand ‘who’ and ‘what’ is covered under a medical malpractice insurance policy, as well as the limits and exclusions.
Practices should strive to obtain coverage for the physicains, the Entity (LLC, Partnership or Corporation, PC), as well as any licensed employees.
An employer can be held liable for the acts of the employees. If there is a professional corporation or Entity, that Entity may hold the business assets or accounts receivable. It is quite conceivable that the Entity may be named in a lawsuit that is primarily against one of the physicians or employees of the Entity. This makes it extremely important to ensure that the issue of Entity coverage is addressed in your malpractice policy.
Most malpractice insurance carriers offer entity coverage with shared limits to solo practices, usually without charging additional premiums. However, if there are two or more practitioners in the group, you can get separate limits of liability for the Entity. This Entity coverage is offered at no additonal premium by some carriers, while others may charge upto an additional 10% of the groups total premium to add this coverage.
Separate limits of coverage of $1M each claim/$3M Aggregate may be available to a Professional Entity. A Professional Entity is the ‘Professional service corporation (PC), Professional LLC, Partnership or LLP’ of an insured physician.
To be eligible for coverage, the Professional Entity must meet the following eligibility requirements:
PRI (Physicians’ Reciprocal Insurers)
PRI provides Entity coverage to a physician groups (such as a PC or PLLC) for no additional charge. The physicians and extenders in the group would have to meet PRI’s underwriting criteria AND be insured by PRI in order to qualify for this coverage. This is a huge savings for groups: Some other carriers can charge upto 10% of the total premiums to add Entity coverage.
MLMIC:
MLMIC can provide Entity coverage for an additional charge. This premium charge is calculated as a percentage of the total premiums for all physicians in the group combined. Additionally:
- MLMIC must insure at least 75% of the members and/or employed physicians of the entity;
- The Professional Entity must be incorporated in NY State;
- Members and employed physicians, surgeons or physician extenders in the practice must be acceptable based on MLMIC’s underwriting standards; and
- All members, employed physicians and/or physician extenders must carry individual limits of insurance of at least $1M/$3M.
Risk Retention Groups:
Entity coverage guidelines differ amongst RRGs. While most RRGs (Such as Medpro RRG) offer separate limits of coverage for the Entity, the additional premiums charged may differ from one carrier to the other. It would be advisable to review all possible options before deciding on the best possible malpractice insurance solution for your practice.
For more information, and to explore all your options, please contact PriMed Consulting at 800.528.3758. Email: info@primedconsulting.com. PriMed Consulting is an independent medical professional liability agency, serving NY & NJ.
Source: Carrier websites
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