Learning Center

Professional liability insurance (Medical Malpractice, Dental Malpractice, and Optometrist Professional Liability):

Also known as malpractice coverage or errors and omissions (E&O) coverage; covers liability for damages arising from the rendering of or failure to render professional services.

Billing Error & Omission

Healthcare providers, including: hospitals, physician practices, nursing homes, home health agencies, durable medical equipment suppliers and any other provider or supplier that bills Medicare Parts A and B are now faced with the reality that the Recovery Audit Contractor (RAC) audits have spread nationwide!
Defined by the Centers for Medicare and Medicaid Services (CMS) as an aggressive program to;find and prevent waste, fraud and abuse in Medicare,” federally hired contractors, paid on a contingency basis (i.e. retaining between 9%-12% of payments recovered), have recouped more than $993 million as of 2008 in improper payments that did not meet Medicare’s coding or medical necessity policies
In addition to physically reviewing medical records, RACs also use electronic automated reviews searching for billing patterns that appear higher than the majority of providers in the community. Improper payments on claims can occur for the following reasons:

  • Payments are made for services that do not meet Medicare’s medical necessity criteria.

  • Payments are made for services that are incorrectly coded.

  • Providers fail to submit documentation when requested, or fail to submit enough documentation to support the claim.

  • Other reasons, such as basing claim payments on outdated fee schedules, or the provider is paid twice because duplicate claims were submitted.

  • Government inquiries allow only 30 days for response.

  • Government take-backs can occur in 60 days or less.

  • Compliance and documentation are critical but not always sufficient.

  • Severe penalties can be incurred for those who are unprepared.

Cyber Liability

Network Security & Privacy exposure, with the transition to electronic medical records, data has become much more portable and easier to access. This makes healthcare much more efficient, but it also increases the risk of medical records being stolen or hacked into. Healthcare providers that store private information are responsible for keeping this information safe. If a company loses private information they can incur significant financial losses. Some of the possible expenses include: Patient notification, credit monitoring, legal fees, third party financial losses, credit card reissuing fees, IT forensics, regulatory fines/penalties, and more. These expenses combine for a national average in 2009 of over $200 per record lost. This means that a breach of 500 records could cost as much as $100,000.

Commercial General Liability Insurance

Covers liability exposures that are common to all organizations; a combination of three separate coverage’s, each with its own insuring agreement and exclusions: Coverage A = general liability; Coverage B = personal injury and advertising injury liability; and Coverage C = medical payments.

Workers Compensation and Employers; Liability Insurance

The first part covers expenses an employer are mandated to pay by state statute to cover specific benefits for employee injuries. The second part protects employers from employee-related suits that are separate from WC claims.
Umbrella Liability Insurance
Provides excess coverage over several primary policies, such as CGL, auto liability and employer’s liability. Increases the amount of liability insurance beyond that of the basic policies carried by the nonprofit and reaches out to cover areas of unknown exposures lacking in the basic insurance policy.

Directors and Officers liability insurance (D and O insurance)

Insurance that provides coverage against wrongful acts which might include actual or alleged errors, omissions, misleading statements, and neglect or breach of duty on the part of the board of directors and other insured persons and entities. Many D&O policies include employment practices liability coverage.

Employment Practices Liability Insurance (EPLI or EPL)

Insurance that provides coverage for claims arising out of employment practices. EPLI policies generally cover the organization, its directors, officers, and employees.

Disability insurance

Provides an employee security by providing an income should he or she become sick or injured and unable to work.

Employee benefits liability (EBL)

Covers errors and omissions in the administration of the insured’s employee benefits such as health insurance or pension benefits.

Fiduciary liability

Protects the fiduciaries of health and welfare, or pension plans from claims by employees alleging financial loss due to mismanagement of funds.

Excess liability insurance

Provides coverage over and above primary insurance. The coverage is triggered when the amount of a loss exceeds (exhausts) an existing primary policy. Excess liability coverage mirrors the terms and conditions of the underlying policy.

Types of Insurance Companies

Stander Company:

Insurance companies that insure Stander Physicians who has been practicing medicine without claim, medical board action, or have one claim.
Nonstandard Companies:
Insurance companies that insured Nonstandard Physicians who have claims, medical board action, Est.…

Trust Company:

Is a corporation, especially a commercial bank, organized to perform the fiduciary of trusts and agencies. It is normally owned by one of three types of structures: an independent partnership, a bank, or a law firm, each of which specializes in being a trustee of various kinds of trusts and in managing estates. Trust companies are not required to exercise all of the powers that they are granted. Further, the fact that a trust company in one jurisdiction does not perform all of the duties of a trust company in another jurisdiction is irrelevant and does not have any bearing on whether either company is truly a "trust company". Therefore, it is safe to say that the term "trust company" must not be narrowly construed.

The "trust" name refers to the ability of the institution's trust department to act as a trustee – someone who administers financial assets on behalf of another. The assets are typically held in the form of a trust, a legal instrument that spells out the beneficiaries and what the money can be spent for.
A trustee will manage investments, keep records, manage assets, prepare court accountings, pay bills (depending on the nature of the trust) medical expenses, charitable gifts, inheritances or other distributions of income and principal.

Rick Retention Group (RRG):

Is a type of insurance company. The way that an RRG is different than a "traditional" insurance company is that each of its policy holders is also stockholders. In addition most insurance companies are formed under state laws but RRGS are formed under federal laws - The Federal Liability Risk Retention Act of 1986. A RRG will allow members who engage in similar or related business or activities to write liability insurance for all or any portion of the exposures of group members, excluding first party coverage’s, such as property, worker s compensation and personal lines. Authorization under the federal statute allows a group to be chartered in one state, but able to engage in the business of insurance in all states, subject to certain specific and limited restrictions. The Federal Act preempts state law in many significant ways. The 1986 Liability Risk Retention Act allows two types of insurance entities to form an RRG and also a Risk Purchasing Group (RPG).

Policy Type

There are three types
Occurrence Policy: A liability coverage form that covers claims that occur during the policy period, and for which claims can be reported to the insurance company at any time during or after the policy period.

Claims-made Policy: A liability coverage form that requires that claims be reported to the insurance company while the policy is still in force in order for coverage to apply. In other words, a claim must be made while the policy is in force.

Claim Paid Policy: A liability coverage form that requires that claims be reported to the insurance company while the policy is still in force in order for coverage to apply. In other words, a claim must be made while the policy is in force. But if you leave your current insurance company and you have an open claim in progress you will take the claim with you.

Limits: The common coverage you see in malpractice policy is $1,000,000 per claim and $3,000,000 aggregate, high limits are available for extra premium. All legal expenses usually are out side the lime of the policy in the standard company, but they are inside the limit with the nonstandard company.

Aggregate limit: Maximum amount that the insurer will pay under a liability policy during one annual policy period, regardless of the number of occurrences, usually in addition to legal defense costs. For general liability, policies are sometimes written with the aggregate limit applying separately to each scheduled location.

Deductible: Amount deducted from a loss. The deductible is an amount assumed in advance by an insured as required by the insurance company or as a means of obtaining a lower premium for the coverage. Also, the amount of the loss that the insured must pay.

Self Insured Retention: Similar to a deductible except that until the SIR is exhausted the insured will generally be responsible for performing the loss adjustment functions that would otherwise be undertaken by an insurance company.

Prior acts coverage Or Retro Date Coverage: Coverage for all acts that occurred before the policy was issued. Prior acts coverage is one of the means of covering the gap in coverage when switching from a claims-made policy to another claims-made policy or to an occurrence policy. The prior acts coverage is provided by the new policy, as opposed to tail coverage that is added by endorsement to an expired claims-made policy.

Tail Coverage: Additional insurance to cover any claims that may arise after termination of a claims-made policy.

Locum Tenants: when the insured is schedule to work and does not show up for whatever reason you can have another physicians to cover those hours and that physician will be covered under the insured policy for that time, same thing if the insured go on vacation.


General FAQs

Life FAQs

Umbrella FAQs

General FAQs

Q: What kinds of questions should I be expected to answer when I apply for an insurance policy?

Why do insurers need so much information?
A: When you apply for an insurance policy, you'll be asked a number of questions. Among other things, the agent might ask you your name, age, gender, and address. You'll also be asked a number of other questions which will be used to determine how likely you are to make a claim.
When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, they want to know about the person's previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured.
Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you.
In addition to your age, gender, and driving experience, they will also need information about the vehicle you drive and how you drive it to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact; and, someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends.

Q: What are the advantages to using an agent to purchase insurance?

A: By using an agent to purchase insurance, the policy holder receives more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. A local independent agent is able to deliver quality insurance with competitive pricing and local, personalized service.


Life FAQs

Q: How much life insurance should an individual own?

A: Rule of thumb suggests an amount of life insurance equal to 6-8 times annual earnings. However, many factors should be taken into account when determining the right amount of life insurance for you and your family.
Important factors include:
Income sources (and amounts) other than salary/earnings
Whether or not you are married and, if so, what your spouse's earning capacity is
The number of individuals who are financially dependent upon you
The amount of death benefits payable from Social Security and from an employer-sponsored life insurance plan
Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need, etc.)
Calculating the correct amount of life insurance to buy is not as simple as it appears. We recommend contacting us for help determining the right amount of coverage. As independent agents, we are unbiased advisors that will help you avoid buying too much, show you appropriate optional coverage for your need, and recommend a company that will best serve your interests.

Q: What about purchasing life insurance on a spouse and on children?

A: In certain circumstances, it may be advisable to purchase life insurance on children; generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s).
It is of utmost importance that the income-earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance. This should be done before contemplating the purchase of life insurance on children or on a non-wage-earning spouse. Life insurance on a non-wage-earning spouse is often recommended for the purpose of paying for household services lost due to this individual's death. In a dual-earning household, it is important to protect the income earning capacity of both spouses.

Q: Should term insurance or cash value life insurance be purchased?

A: This is a difficult question that can only be answered depending on your personal circumstances.
First, recognize that in any life insurance purchasing decision, two questions must be answered:
How much life insurance should I buy?
What type of life insurance policy should I buy?
If you are on a tight budget, you may opt for term life insurance which tends to be the least expensive life insurance option you can choose.
If your ability to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the second question: what type of policy to buy. Important factors affecting this decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk.

Q: How does mortgage protection term insurance differ from other types of term life insurance?

A: The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25, or 30 years. Although the face amount decreases over time, the premium usually remains the same. Further, the premium payment period often is shorter than the maximum period of insurance coverage. For example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.

Q: Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan?

A: Yes. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured's death. Although a lender may offer a mortgage protection term policy to you, the lender rarely requires it.
Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy?
Credit life insurance is frequently more expensive than traditional term life insurance. Further, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advisable due to its relatively high cost.


Umbrella FAQs

Q: What is a personal umbrella liability policy?

A: A personal umbrella liability policy is designed to increase your liability protection. This single policy acts as an "umbrella" over all of your other personal liability policies (home, auto, boat, RV, etc.) so you have a higher personal liability limit than what would otherwise be available. In certain circumstances, an umbrella policy may provide personal liability coverage that is otherwise excluded from your other policies. For example, an umbrella policy provides coverage anywhere in the world, whereas your auto policy usually provides coverage in the U.S. and Canada only.

Q: How do I know if I need a personal umbrella liability policy?

A: It used to be that the only people who needed personal umbrella liability policies were wealthy individuals who had sizable amounts of personal assets that would be at risk in a lawsuit. However, in our very litigious society, even individuals with modest incomes and assets are often subjects of large lawsuits. Since they are even less able than a wealthy individual to pay large damage awards, they recognize the need to have coverage limits greater than what can be obtained from their homeowner or auto policies.