A client had recently signed a lease for office and was going into business after years of working for a hospital in claims and billing as a private medical billing service. At a party, she informed some friends about her new venture and as business owners they shared their insurance rates with her. The next day, she called in tears thinking she couldn’t afford business insurance based on the premiums her friends shared.
After calming down our new client, we discussed the business insurance options available to our new entrepreneur. The first issue we discussed was that every business is going to have different needs, risk, and exposure. Her friends had a number of employees and company vehicles as well as several locations, so naturally their coverage would be different than a single owner start up company.
We pointed out that every business needs a combination of liability insurance, property insurance, and workers or employee insurance. Our discussion included business owner’s policies, additional insurance coverage like Errors and Omissions which every medical billing company needs, an umbrella policy, boiler and machinery or equipment breakdown coverage, commercial auto insurance and many different options. As you read this, much like our no longer frantic caller, you’re probably recognizing there are many options available to business owners, not just medical billing offices.
Let’s break down why we recommended certain coverage for the medical billing business. Every business needs general liability and property insurance which we often discuss. Professional liability insurance is needed for the medical billing for additional protection in the event a bill is sent in error, to a wrong address or person, or the wrong billed for the practice.
Equipment breakdown coverage will protect the business in the event of a problem keeping the business from billing on a timely and efficient basis. The umbrella coverage is additional protection in the event the professional or general liability limit is exceeded in an award or judgment.
Working with your licensed insurance professional, let them guide you through the coverage options available to you now, and as your business grows. Make sure you are totally honest with your agent regarding the assets of your business, how much travel will be involved from driving to flying, and a review of any lease you be considering. Together, you can create an insurance package that works for you.