Insurance can often be viewed as one of life’s most annoying expenses, an annual financial burden you may never see a tangible return on. High costs, unfamiliar terminology, and long contracts written in fine print can make it difficult to gain a true understanding of the basic policies that keep your career safe.
Essentials for the ECP
In order to practice legally, eyecare professionals have to meet certain insurance requirements, which can vary from state to state. It is essential to visit your licensing board’s website and familiarize yourself with the coverage requirements of your state of practice—and check back each year before renewing your policy to keep up with any changes. Those in the optical field without a license, such as ophthalmic technicians and practice staff, still require coverage because they interact with patients directly.
→ Professional Liability Insurance (Malpractice): Covers claims of negligence, errors, or omissions during patient care.
→ Workers’ Compensation Insurance: Mandatory coverage providing protection and wage replacement to employees in case of work-related injuries or illness.
→ Disability, Critical Illness, and Health Insurance: Personal protection for practitioners ensuring financial stability in the event of long-term disability or illness.
→ General Liability Insurance: Covers bodily injury or property damage claims arising from daily operations.
→ Umbrella Insurance: An extra layer of liability coverage that kicks in when other policy limits are exceeded.
Essentials for the Business
Considering these types of insurance requires us to view our business through the lens of worst-case scenarios. While this can feel uncomfortable, there is no greater relief than knowing you are protected when the unthinkable happens.
→ Commercial Property Insurance: Protects against damage to equipment, frames, lenses, and specialized tools. Annual assessments of product costs should include considerations for inventory fluctuations and special high-value eyewear collections.
→ Business Interruption Insurance: Financial protection in the event of incidents such as fire, theft, or natural disasters. To avoid losing good employees due to a temporary closure, ensure that a policy stipulation is included that protects payroll expenses.
→ Cyber Liability Insurance: Protects against breaches of patient data and personal information, covering both internal (disgruntled staff) and external third-party threats. Optional but growing in need due to sensitive digital data like patient records, health data, and credit card information.
QUESTIONS TO ASK
You cannot assume that your employer has adequate coverage in place to protect you. Here are five questions you should ask:
1. “Does the practice provide professional liability insurance coverage for me, or should I carry my own policy?”
2. “If I make an honest mistake or face a patient complaint, how does our insurance policy protect me?”
3. “Am I covered under workers’ compensation insurance if I experience an injury while working?”
4. “If a patient or co-worker files a claim against me, will the practice assist me legally and financially?”
5. “Are there any specific requirements I need to fulfill to maintain coverage under the practice’s insurance policies?”
→ Employment Practices Liability Insurance: Covers legal defense for employment-related claims (wrongful dismissal, discrimination, harassment, etc.).
Tips to Stay Covered
→ Annual Insurance Review: Schedule a yearly review with your provider three months prior to the policy’s expiration date. Reassess coverage limits, deductibles, and policy inclusions as the business evolves. Your annual profits, new inventory or equipment, additional service offerings, or the number of employees you have can all affect the annual premiums. By conducting this in advance, there are no surprises. If the cost of the policy has increased, you have time to shop around and compare coverage from different insurance providers.
→ Inventory Management: Regularly reconcile inventory values with coverage limits, updating coverage as eyewear collections and equipment inventories change. You should always ask yourself, “If I needed to repurchase this item, would it cost more?” Coverage amounts should always be based on a calculator to match inflation.
→ Documentation: Run an inventory valuation report monthly, keep digital copies of equipment receipts, and take regular notes of office improvements, including photos. Keep these items easily accessible in a digital format to streamline the claims process. If you ever encounter a situation that you feel could lead to litigation or a claim, take extensive notes, including the time and place, and take statements from other people present.
→ Deductibles: Understanding your deductible amounts, setting aside financial reserves to cover them, and maintaining sufficient liquidity for emergency access are essential to ensuring your insurance coverage is accessible.
→ Exceed Requirements: When deciding on a policy and coverage amounts, whether it be a required necessity of licensing or conducting business, always exceed the minimum requirements. It is impossible to calculate the cost of a lawsuit or disaster, but should you ever be exposed to that situation, the few extra dollars you spent on increasing your insurance coverage will be worth every penny!