Business Insurance Guide¶

Overview¶

Beyond malpractice insurance, your DPC practice needs additional coverage to protect against business risks. General liability, property damage, cyber threats, and other exposures require appropriate insurance protection.

This guide covers the business insurance needs for a DPC practice beyond professional liability.

[!CAUTION] Consult an Insurance Professional: Insurance requirements vary by state, and coverage needs depend on your specific practice model. Work with an insurance broker who understands healthcare businesses to ensure you have appropriate coverage without gaps. Verify that all your practice activities (home visits, telehealth, dispensing) are covered under your policies.

Prerequisites¶

• Malpractice insurance secured (see Professional Liability Guide)
• Office space determined (affects coverage needs)
• Understanding of your business operations

Types of Business Insurance¶

General Liability Insurance¶

What it covers: - Third-party bodily injury at your location - Third-party property damage - Personal injury (libel, slander) - Advertising injury - Legal defense costs

Examples of covered claims: - Patient slips on wet floor in waiting room - Your sign falls and damages someone's car - Fire in your office spreads to neighboring suite

What it doesn't cover: - Professional malpractice (that's malpractice insurance) - Employee injuries (that's workers' comp) - Your own property damage (that's property insurance)

Typical coverage: - $1,000,000 per occurrence - $2,000,000 aggregate - May be higher depending on lease requirements

Cost: $400-$1,500/year for most small DPC practices

Business Property Insurance¶

What it covers: - Your owned equipment and furniture - Tenant improvements - Business personal property - May cover loss of income from covered events

What to insure: - Medical equipment - Computers and technology - Furniture - Supplies and inventory - Leasehold improvements

Types of coverage: - Replacement cost: Pays to replace with new items - Actual cash value: Pays depreciated value (less coverage, lower premium)

Cost: $300-$1,000/year depending on property value

Business Owner's Policy (BOP)¶

What it is: Bundled package combining general liability and property insurance, often at lower cost than separate policies.

Typically includes: - General liability coverage - Business property coverage - Business interruption coverage - Often includes other coverages

Advantages: - Simpler (one policy) - Often cheaper than separate policies - Good for small businesses

Disadvantages: - Less customizable - May include coverage you don't need - May not include coverage you do need

Recommendation: For most small DPC practices, a BOP is a good starting point. Compare to separate policies.

Cyber Liability Insurance¶

What it covers: - Data breach response costs - Notification costs - Credit monitoring for affected individuals - Legal defense for privacy claims - Regulatory fines and penalties - Business interruption from cyber events - Ransomware payments (some policies)

Why DPC practices need it: - You have protected health information (PHI) - HIPAA breaches can be costly - Small practices are targets (perceived as less secure) - Even with good security, breaches happen

Typical coverage: - $100,000-$1,000,000 depending on practice size - Consider higher if storing significant patient data

Cost: $500-$2,000/year for small practices

Increasingly important: Cyber coverage has become essential for any healthcare practice handling electronic PHI.

Workers' Compensation Insurance¶

What it covers: - Employee injuries on the job - Medical expenses for work injuries - Lost wages for injured employees - Legal defense for workers' comp claims

When required: - Most states require workers' comp when you have employees - Some states have exemptions for very small employers - Requirements vary—check your state

If you're solo: - Generally not required if no employees - Some states allow/require owner coverage - Consider when hiring first employee

Cost: Varies significantly by state and classification

Employment Practices Liability Insurance (EPLI)¶

What it covers: - Wrongful termination claims - Discrimination claims - Sexual harassment claims - Other employment-related lawsuits

When to consider: - When hiring employees - As panel grows and you add staff - If concerned about employment liability

For solo DPC: Not needed until hiring staff.

Cost: $500-$2,000/year depending on number of employees

Business Interruption Insurance¶

What it covers: - Lost income when you can't operate due to covered event - Continuing expenses during closure - Extra expenses to maintain operations

Examples: - Fire damages office; can't see patients for months - Natural disaster forces closure - Major equipment failure

Often included in: BOP policies or property insurance

Consider carefully: Your membership model may provide some buffer (recurring revenue), but extended closure still creates financial stress.

DPC-Specific Insurance Considerations¶

Your Risk Profile¶

Lower risk factors: - Small office footprint - Limited staff (or solo) - Minimal equipment - Limited public traffic

Higher risk factors: - Home visits (auto and off-site liability) - Dispensing medications (product liability) - Procedure room (higher injury potential) - Higher patient volume office

Coverage Based on Practice Model¶

Lease Requirements¶

Landlords often require: - Minimum general liability coverage (often $1M/$2M) - Property coverage for your improvements - Landlord named as additional insured - Certificate of insurance

Action: Review lease before signing; factor insurance costs into space decisions.

Coverage Gaps to Avoid¶

Gap 1: Professional vs. General Liability¶

Problem: Thinking malpractice covers everything. Solution: Malpractice covers professional acts; general liability covers premises and operations.

Gap 2: Cyber Coverage¶

Problem: Assuming general liability covers data breaches. Solution: Get dedicated cyber coverage; most GL policies exclude cyber events.

Gap 3: Home Office Coverage¶

Problem: Assuming homeowner's policy covers business. Solution: Homeowner's typically excludes business use; need business coverage or endorsement.

Gap 4: Auto Coverage¶

Problem: Using personal car for house calls without business auto coverage. Solution: Check personal auto policy; may need endorsement or commercial auto.

Gap 5: Employee Coverage¶

Problem: Hiring first employee without workers' comp. Solution: Get workers' comp before employee starts; it's required in most states.

Purchasing Insurance¶

Where to Buy¶

Insurance agents/brokers: - Can compare multiple carriers - Understand healthcare business needs - Help with coverage gaps - Handle claims assistance

Direct from carriers: - May be cheaper for simple needs - Less personalized service - Requires more self-education

Professional associations: - Medical societies often offer programs - May have group rates - Designed for physician practices

Getting Quotes¶

Information needed: - Business name and entity type - Address and square footage - Services provided - Number of employees - Annual revenue (estimate) - Equipment/property value - Prior claims history

Tips: - Get multiple quotes - Compare apples to apples (same coverage limits) - Look at total cost, not just premium - Consider deductibles (higher deductible = lower premium) - Verify carrier financial strength

Starting Lean: Insurance Approach¶

Essential from Day One¶

• Malpractice insurance (see separate guide)
• General liability (especially if seeing patients at any location)

Add as You Grow¶

• Cyber liability (as soon as you have electronic PHI)
• Property insurance (when you have significant equipment)
• Workers' comp (when hiring employees)

Consider Based on Situation¶

• EPLI (when hiring employees)
• Business auto (if doing house calls)
• Umbrella coverage (for additional protection)

Budget Expectations¶

Total for lean solo practice: $1,000-$3,000/year (excluding malpractice)

Managing Costs¶

Cost Reduction Strategies¶

• Bundle policies (BOP vs. separate)
• Higher deductibles
• Shop regularly (every 2-3 years)
• Join professional association programs
• Maintain good claims history
• Risk management practices

Don't Cut Costs By¶

• Underinsuring property
• Skipping cyber coverage
• Reducing liability limits below prudent levels
• Going without coverage

Checklist: Business Insurance¶

Assess Needs¶

• Review lease requirements
• Inventory equipment and property
• Identify all practice activities (telehealth, house calls, procedures)
• Determine employee plans

Get Coverage¶

• General liability (or BOP)
• Property insurance (or BOP)
• Cyber liability
• Workers' comp (when hiring)

Verify Adequacy¶

• Coverage meets lease requirements
• All activities covered
• Limits appropriate for exposure
• Deductibles manageable

Maintain¶

• Keep certificates of insurance accessible
• Note renewal dates
• Update coverage as practice changes
• Review annually

Resources¶

• Professional Liability Guide - Malpractice insurance
• Startup Costs Overview - Budgeting for insurance
• Office Space Guide - Lease insurance requirements
• Insurance Information Institute (iii.org) - General insurance education

Next Steps¶

After securing business insurance: - Working with Attorneys - Legal support - Business Registration Checklist - Continue setup