Setting up a Medical Practice Part 6: Getting Commercial Insurance

A comprehensive insurance plan is crucial for your medical practice, but over-insurance isn’t necessary. The key is to comprehend the array of insurance types available, and then determine which ones align with your specific practice requirements and personal choices.

  1. Medical Liability Insurance: Mandatory for all physicians in Canada, offering professional liability protection and medical-legal advice.
  2. Business Insurance for Medical Practices: Business insurance is a broad term covering several areas and can be availed either as a package or as separate entities. This insurance type for medical practices may comprise:

    Business Overhead Insurance
    This insurance caters to your fixed overhead expenses (like rent, utilities, and property taxes) if you’re unable to practice. It’s particularly useful for larger practices with high fixed costs or for new practices that lack sufficient savings for emergencies.

    Business Interruption Insurance
    This insurance minimizes the impact of unpredictable natural calamities or global incidents. It’s either offered independently or as part of a comprehensive business insurance policy. Different from regular property insurance, it covers lost wages as well.

    General Liability Insurance
    This insurance, often part of medical practice insurance packages, covers the expense of any injuries or property damage. Essential for all businesses, it protects against unexpected incidents like falls in the waiting area or electrical line damage in the parking area.

  3. Property Insurance: Essential for protection against damage to buildings and specialized medical equipment. Accurate valuation is recommended.
  4. Worker’s Compensation and Group Disability Insurance: Required registration for businesses in Canada to cover employees in the event of injury or inability to work. Group disability benefits are optional.
  5. Life Insurance: Optional, but favored by many physicians for providing financial security to dependents. Some groups may require it for all partners or key team members.
  6. Financial Insurance: Worth considering if you have a business loan, to guard against unforeseen business loss. This is especially true for substantial loans or mortgages.
  7. Business Auto Insurance: Essential if vehicles are used for business purposes, including home visits or mobile clinics. It may be worth considering even if operations are primarily based in one location, if there is business-related travel.

    Make sure to catch up on Part 1: Types of Practice , Part 2:Writing a Business Plan , Part 3: Budgeting  , Part 4: Choosing Location and Part 5: Leasing vs Buying Office Space