While malpractice insurance protects individual physicians, errors and omissions insurance (E&O) protects medical groups.
E&O insurance provides coverage for errors and omissions in the everyday processes of a medical group. It protects groups that made a mistake (error) when working with a patient or did not give them what they needed (omission). However, it does not cover criminal actions or intentional mistakes.
Errors and omissions insurance can cover things such as:
For example, a patient might sue because a staff member failed to keep their health information confidential. That claim wouldn’t be insured under regular malpractice coverage, but it would be protected under E&O.
E&O limits (the max payouts an insurance provider will reward for a claim) vary depending on:
Usually, E&O policies will have a claim limit and an annual aggregate limit. A claim limit is the maximum amount the insurance company will pay for any single event. An annual aggregate limit is the maximum amount that the insurance company will pay in a single year, regardless of how many claims arise.
Both the claim and the annual aggregate limits are determined using the insured’s calculated risk exposure. For example, a 1M/3M policy has a $1,000,000 claim limit and a $3,000,000 million annual aggregate limit.
There are many factors that affect premium prices, such as:
The price of a premium is based on the claim limit and annual aggregate limit of the policy. As one might expect, policies with high limits (and therefore more protection) are more expensive.
Additionally, the age of the medical group can affect premiums. Many insurance providers prefer stable, established groups. Larger groups face higher premiums because more employees bring more risk.
Finally, claims history has a large impact on premium prices. If a medical group has prior claims, an insurance company may charge more.
In general, E&O coverage is highly customizable, which helps medical groups work with insurers to find a policy and price that meets their needs.
While malpractice insurance covers individual physicians, errors and omissions insurance protects medical groups. E&O insurance is wide-ranging, covering many types of mistakes that staff, directors, volunteers, or others could make. E&O policies tend to be flexible, with negotiable levels of coverage and pricing.
If you're interesting in more information on E&O insurance, contact the Capson team now.