Applying for malpractice insurance

As you begin work on your business plan and start into chiropractic practice, you will want to find the cost of malpractice insurance and begin making decisions on what kind of insurance policy to take out. Many options are available. Consider these policy clauses:

1. Where will you be practicing? Insurance costs vary by state, based on claims experience in that state. Usually the most populated states (N.Y., Calif., and Fla.) have higher rates, but the scope of the practice is also taken into consideration.

2. What level of coverage do you want? The more coverage, the higher the cost. Find out what coverage level is required by the insurance carriers and networks you’ll be dealing with. The majority want a minimum of $1 million per occurrence and $3 million per year).

3. Do you want occurrence or claims-made insurance? The term “claims made” means that the policy must be active when the claim is made. If a claim comes in after the policy has lapsed, it is as if there was never a policy in place. If you want to be covered for claims that come in after the policy stops, you must have “tail coverage.” Occurrence coverage includes “tail” coverage. You will pay more for occurrence coverage in the first few years of practice.

4. Are there discounts for new chiropractors? You’ll find that most malpractice insurance companies provide substantial discounts. For example, NCMIC, one of the largest carriers, gives you a 75 percent reduction the first year, 40 percent the second, 35 percent the third, and 15 percent the fourth year. You may also be eligible for discounts if you have no claims for a period of time.

5. What about the fine print? Ask for a sample policy and read carefully. Find out if your malpractice carrier has a “consent to settle” clause, which means you must give consent before they settle. Check if there is a “hammer” clause, which stipulates that if you refuse a settlement offer recommend by the insurer, the insurer’s liability is limited to the amount of the recommended settlement offer.

You can get a quote by calling the insurance carriers directly.