“Ask eQuoteMD, with Tim Ryan.” A medical malpractice insurance video blog question and answer session to help physicians have a better understanding of their coverage options. eQuoteMD provides quality solutions for medical malpractice insurance to doctors, surgeons, clinics, hospitals and facilities across the United States.
Video Transcript –
Tim Ryan: Hello and welcome to eQuoteMD’s medical malpractice insurance video blog. I’m Tim Ryan and I’m here to answer any of your questions regarding your medical malpractice insurance coverage. Today we will be speaking about entity coverage.
Recently, one of my clients approached me and wanted to know exactly what entity coverage was, what exactly it covered and how much would it cost. Now, entity coverage is extremely important to any medical malpractice insurance program.
When we say, entity, that is essentially referring to a corporation, or in the case of medical malpractice insurance coverage, your PC or your PLLC. Now, corporations, legally speaking, are known as fictitious people. In the sense that they can almost do anything a real person can in the business world. For example, they can own property, they can enter into contracts, but in this case they can be sued. So, if you have a PC or a PLLC it can actually be named in the lawsuit and if it doesn’t have coverage, the owner of the PC or PLLC, will be held liable.
So for example, let’s take a fictitious Dr. Johnson. If Dr. Johnson purchases medical malpractice insurance coverage on himself but not his PC he could be in trouble. If he is sued, and the PC is named in the lawsuit, Dr. Johnson will be covered by the insurance company, but the PC will not be. Any defense costs or liability incurred by the PC will transfer to the owner, which is generally the doctor and in this case Dr. Johnson, and Dr. Johnson will still have to pay out any monetary claims that are due. So, you can start to see how important understanding entity coverage really is.
Now, the next logical question is,”Ok I want my PC covered,” but how much is it going to cost. Well that depends how you set the medical malpractice insurance coverage up. There is generally two ways to do that. The first way is what we call split or separate limits. The second way is shared limits. When we talk about limits, that refers to the limits of liability. So in most states in the country the limits of liability are $1,000,000/$3,000,000. Some states are lower, some states are higher, but for this example we use $1,000,000/$3,000,000.
In the separate limits, or split limits, if you do that option the doctor will have $1,000,000 coverage per claim and the PC will have an additional $1,000,000 of coverage per claim. This option generally costs more than to the doctor simply being insured by himself. The second way to do it is to do shared limits. In this case, the doctor and the PC will share the $1,000,000 of liability coverage the medical malpractice insurance company provides. About 95 percent of my doctors will go this direction as opposed to the separate limits. Although, both are available to you. Shared limits, again, is of no cost, generally, to most doctors.
All of this to say, there are no cookie cutter answers or one-size fits all solutions to your specific medical malpractice insurance needs in your practice. Make sure that are confidant, in the medical malpractice insurance world, is experienced and knowledgeable about entity coverage to make sure that you are fully protected in the event of a lawsuit.
Once again, I’m Tim Ryan for eQuoteMD. Have a great day and we will talk to you soon!
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