CHAPTER 9
Insurance Requirements
for the Urgent Care Center
David Wood
from
WHETHER YOU ARE STARTING a new urgent care center or currently own one, arranging the various types of business insurance policies can seem challenging and complex. The types of insurance are organized into categories in this chapter so you can focus on the most important policies first and then determine when your budget allows you to purchase other types of insurance. You should consider purchasing all of these, though, as they are all important.
Must-have insurance policies:
• Medical-professional liability insurance (i.e., malpractice insurance)
• Business insurance (property, general liability, auto, umbrella)
• Workers’ compensation
• Life and disability
Might-consider policies:
• Employment practices liability
• Billing errors and omissions (E&O)
• Employee benefits
• Cyber-technology
Not-sure-at-this-time policies:
• Directors’ and officers’ liability
• Fiduciary liability
• Crime and fidelity
• Outbreak expense
Reviewing each type of coverage in detail is beyond the scope of this chapter. This chapter will get you started with the basics of the must-have insurance coverage. But please ask your insurance representative about the others that are listed.
There are three sources of medical-professional liability insurance:
Commercial insurers These can be found by using an insurance agent.
Local mutual insurance companies These are normally the main in-state providers of medical-professional liability insurance.
Risk retention groups (RRGs) These were created by the federal Liability Risk Retention Act. RRGs must form as liability insurance companies under the laws of their charter state. The benefits of RRGs include the ability of members to
• Manage their own programs
• Obtain premium stability
• Implement risk-management practices
• Pay dividends for good loss experience
• Access reinsurance markets
• Maintain a consistent source of liability coverage
• Operate on a multistate level
The first evaluation of any of these three insurance sources is their financial stability and strength. The easiest way to determine this is to find out each insurer’s A.M. Best rating. A.M. Best rates insurers on their financial strength, stability, and experience. There are several other rating firms, but A.M. Best is one of the largest and most commonly used by the industry and third parties you might contract with that will incorporate insurance requirements in their contracts.
Purchase coverage from insurers that hold an A.M. Best rating of A (excellent) VIII or higher. The letter A represents how well they run their company, and the roman numeral represents their financial size. The roman numeral VIII means that they have between $100 million and $250 million in policyholder surplus. The roman numeral XV is the highest category ($2 billion or more in surplus). Some insurers have an A–, A+, or A++ rating. If an insurer is A– rated (still excellent), make sure that it has a roman numeral rating of X or higher and that the A.M. Best outlook regarding the insurer is “stable.” An A+ or A++ (superior) rating means that the insurer is highly regarded because of the way it operates.