Liability Insurance Issues When Adding a New Physician to a Practice
Growth is great in your medical practice. Growing pains are not. The agents at MyMedicalMalpracticeInsurance.com place physician liability insurance coverage for new doctors being added to medical practices on an almost daily basis. And, here are three key points that should always be discussed by both parties when going through this transition.
1. Employee versus independent contractor. It is important to distinguish between being an employee versus an independent contractor for both tax purposes and physician liability insurance. In most cases, a physician employee usually has coverage provided for them under the established group policy, while an independent contractor is usually instructed to purchase his or her own coverage. If the physician is being added to the group policy, there may be additional credits available. However, the independent contractor can shop the market, and may be able to save more money by doing this. Sometimes independent contractor physicians are reimbursed for their physician liability insurance, and sometimes they are not.
2. Don’t Assume Your New Position Will Pick-up Your Prior Acts (Tail). More than likely, if you are coming out of a position and you had a claims-made policy, the new employer will require you to purchase a tail, so you can start anew.
3. The Logistics of Who Purchases the New Employee’s Future Tail. Related to #2 above, we can’t tell you how often we see confusion between the employer and new physician employee about who should purchase the employee’s tail when they part ways. Because of the high turnover in medicine, many employers will usually put the responsibility of purchasing a tail on the new physician or they will require that the physician work for the practice for a certain number of years before they will pick up the cost of the tail. We highly recommend that you get everything in writing and that you go over your contract thoroughly before signing.
These are just a few physician liability insurance considerations when a new physician joins a practice. Contact us today if you would like to discuss these practice details further.