All of the physicians in our practice group are covered with 1M/3M limits, does the entity need to be covered as well?
Absolutely, the corporation can certainly be named in a medical malpractice suit, so we always recommend that you purchase entity coverage from the carrier. While each physician carries his/her own malpractice limit in the event they get sued, the corporation isn’t immune from liability either. Along with employing physicians, the corporation can also also be employing other allied health professionals – NPs, RNs, CRNAs, licensed social workers, etc. Due to the agency principle that exists between the corporation and the employee, any malpractice claim against the employee’s wrongdoing will most likely bring the corporation into the suit. This will be for things such as improperly credentialing someone, having improper policies or procedures, etc.
As far as cost – the cost to insure the entity can be calculated in one of two ways. The first is simply by taking a percentage of physicians’ premiums, typical charge will be 10% of the total physician premiums. The second way is more common in a practice that employs lots of allied health workers, and this method will be computed as a premium based on the number of allied staff or by looking at the number of visits/reads. In either way, the cost isn’t significant and benefit is tremendous.