Managing the insurance policies that protect you and your practice can be confusing. When should you file a claim and how do you do it? Do you have the right protection for your practice? How do you make sense of your policy?
To practice with confidence and peace of mind, it’s important to understand which types of coverage you need and how your policies work.
Even though insurance can be a challenge, it’s important to understand what insurance coverage you need and how your policy works. From 2000 to 2020, according to the National Practitioner Data Bank, optometrists faced 2,813 malpractice cases, or roughly 140 a year. Only 30 percent of these resulted in any monetary payments. Despite the low risk of having a claim filed against you, plaintiffs can be awarded thousands, if not millions in damages.
The following coverage types help protect you and your career against malpractice claims and other risks. This Optometric Practice Protection 101 will help answer your questions about selecting the right coverage for you and your practice and how to understand your policies.
Optometric Practice Protection 101: What Coverage Is Needed
Comprehensive coverage is needed to protect your career, your practice and your future. Most optometry practices need several types of insurance coverage to manage their risk. Some types of coverage are required by law, while others are highly recommended.
These coverages protect you from the most common exposures in the industry:
Malpractice Insurance – Protects against claims of malpractice within your state’s defined scope of practice. For optometrists, having adequate levels of malpractice coverage is required by law.
Business Owners Insurance – Protects against a variety of claim risks including property damage, liability and business interruption.
Cyber Liability Insurance – Protects against damages and claims due to paper file or computer device loss or theft, cyber attacks, hacks and viruses.
Employment Practices Liability Insurance – Protects against claims related to hiring, firing or general workplace discrimination.
Group Practice Insurance – Protects against claims of malpractice if you practice within a group practice setting.
Optometric Practice Protection 101: What Terminology to Know
To help understand your insurance options, policy coverage and claims process, it’s a must to understand some key insurance lingo.
Insurance Coverage – Your coverage is the amount of risk or liability your insurance company agrees to be legally responsible for paying in the event of a qualifying insurance claim for a loss that you suffer.
Named Insureds – This will be you, the policyholder, and/or your business entities you wish to cover under the insurance policy. When applying for coverage, make sure all necessary parties are named as insureds on the policy. Coverage will exclude those entities not named on the policy.
Declarations – The first page of an insurance policy is known as the policy declarations. It specifies the named insureds, policy period, location of premises, liability limits and other key information. Make sure this information is correct and keep the document for your records as proof of your insurance.
Covered Loss – A covered loss is a financial loss for which your insurance company will pay insurance benefits according to the terms of your insurance policy. Covered losses are specifically defined in your policy documents.
Perils – A peril is an event that may damage covered business property, such as your business’s equipment or buildings. Some perils are named perils, such as the fire, flood, hail, earthquake, and wind perils that may be noted in your insurance policy. Your policy may also list excluded perils, which are perils that will not be covered by your insurance.
Endorsements and Exclusions – An endorsement adds specific coverage to an existing insurance policy. An exclusion is a condition or event for which the policy does not provide coverage. Often endorsements and exclusions appear together since it is easier for insurers to exclude certain broad coverages and then add back in more specific coverage with endorsements.
Policy Limit – Your insurance policy limit is the maximum amount the insurer will pay for a covered loss. With some policies, you can choose your own limit, with higher limits resulting in a more expensive policy. Some insurers offer shared limits that are shared between a group of insureds. At Lockton Affinity, we offer individual limits, so you always have access to your full policy limits.
Insurance Deductible – An insurance deductible is the amount of money you agree to pay out of pocket for a covered loss in the event of a claim, with your insurance covering the rest up to your policy limit. Your deductible will apply each time you file a claim.
Insurance Claim – An insurance claim is a formal request for coverage of or compensation for a covered loss. When you file a claim, the insurance company will review your request and approve or deny the claim. Understanding your coverage and following the correct process for filing a claim helps ensure that your claim for a covered loss will be approved.
Optometric Practice Protection 101: How to Read Your Policy
When you purchase insurance coverage, you’ll receive your policy documents in the mail or via email. Since an insurance policy is a legal contract, it must be worded and formatted a certain way. Here’s how to decipher your policy and make sure you understand your coverage.
- Review your policy as soon as you receive it, making sure to:
- Check for correct spelling of your name.
- Verify the entity type for your corporation or group is correct.
- Note any difference of coverage extended to different insureds.
- Check that all forms and endorsements are included.
- Ensure your quoted coverage is included in the policy.
- Make sure no pages are missing.
- Make sure dates match.
- Read through your policy to understand your coverage:
- Annotate your policy’s key coverage, exclusions and definitions.
- Read through the entire insurance agreement.
- Double-check that any expansion in scope of practice is covered.
- Familiarize yourself with the exclusions page.
- Make sure your practice’s functions aren’t excluded.
- Check for references to other sections with further explanation.
- Know your policy’s terms and conditions:
- Note policy definitions to understand your coverage.
- Pay attention to keywords, such as “all”, “any”, “except”, “must”, etc.
- Meet policy conditions to ensure coverage for a loss.
Optometric Practice Protection 101: When to File a Claim
Optometry malpractice practice claims are common, even when no mistake has been made. You always hope you will not have to file a claim, but it’s important to take the right steps if you do need to.
Report all claims promptly at the first notice of a claim, potential claim or lawsuit for the best results. However, in the case of malpractice, timing is especially important. A delay in reporting a malpractice claim can greatly increase the cost of a settlement and may lead to a poorer outcome.
Optometric Practice Protection 101: How to File a Claim
When it’s time to file a claim, gather your insurance documents. Your documents will have instructions of how to contact your insurer, what steps to take before you call and what information you’ll need to provide. Then follow these steps:
- Contact your insurance company—At the first notice of a claim, lawsuit or potential claim, contact your insurer as soon as possible. They will obtain the necessary information to get your claims process started.
- Claims adjustor is assigned—After you have filed a claim and completed all the necessary paperwork, a claims adjustor will be assigned within 1-2 business days. They will review your claim and interview you and any potential witnesses.
- Repair/payment issued—After the claims adjustor settles the claim, the appropriate party will receive payments.
As you report a claim, the timeline will vary depending on the claim and instance. However, the quicker you provide the required information and documentation, the faster your claim will be settled, and you can get back to your practice.
At AOA Insurance Alliance, administered by Lockton Affinity, we’re always eager to answer your questions and ensure you have the coverage you need to protect your optometry practice and your career. If you have questions, email Lockton Affinity at Info@AOAInsuranceAlliance.com.