What is the least amount of insurance I can get by with?

November 26, 2013

By Chad Fleming, O.D., AOAExcel Business and Career coach

That is question we ask ourselves whenever we consider insurance of any kind. On a recent family vacation I found myself wrestling with exactly that.

I rented a Jeep to travel around the island with my wife and two boys. I waited in line at the rental car company dreaming about how the boys were always going to remember this trip. When my turn came, the interaction between myself and the clerk was very cordial. When she got to the question about me wanting to get insurance for the vehicle, I froze. I froze because I was frustrated with myself because I did not take the time to research the coverage my car insurance at home had to cover rental cars.

With a mild explicative that trickled through my thoughts, I asked the clerk to explain to me what was covered. That’s when the “additions” began. She explained that if I had a wreck I would only be covered to a certain percentage and that does not include accidents where it was a result of my negligence. How much? An additional $19.95 per day. This continued on until I couldn’t take it anymore and decided to just take the risk. I declined the rest thinking I was wise in adding the additional coverage. My thoughts of being wise only lasted for seconds as the clerk turned the credit card screen around and showed me the total. I thought to myself, “Better safe than sorry.” Reluctantly I signed the agreement, and she handed me the keys.

One of the most difficult decisions to make as a practice owner is about insurance coverage. How much is too much? Do I really need coverage? To start with, we all know malpractice insurance is not optional. General liability for the practice and coverage of the building and contents is also a must, and many optometrists take it a step further and add an umbrella coverage to the policy.

For optometrists in partnerships, there is key main insurance that must be purchased. In case one of the partners dies, the other partner or partners are insured and can buy the deceased partner out with proceeds going to the estate.

Cyber liability is also an up-and-coming insurance as practice owners are liable for any patient information stolen from them whether physically or in the cloud.

Another insurance to consider is disability, which protects practitioners’ greatest investment: themselves. With disability insurance, the practitioner and their family are protected in the event that they are unable to continue to perform their duties at the office. Many times this is an area in which optometrists are underinsured. The underinsured optometrist does not buy a policy that comes close to replacing the income they currently make. A professional policy that covers one at maximum allowable income is extremely important.

This next part is where I tell you how our practice and doctors are so wise because we have thought of everything. Well, almost everything. Just last week I had the privilege of being taken out for coffee by an individual who markets insurance.

Throughout the discussion I was convinced I did not have a need that he could draw out and close a deal with a solution. Fortunately for him, he asked the right questions and found a weakness in my armor, disability insurance. He knew I was in a partnership and asked me what would happen if one of the doctors became disabled. Maybe not completely, but only functioning at 50 percent? My answer was that my partners have disability and should be covered very nicely if the unfortunate happened.

My coffee conversationalist turned the table on me by asking, what about you Chad? How will the production of the practice be made up so that you don’t sink your practice net? Great question, I thought. What would happen? Then it dawned on me, we would be in trouble. In fact, recently one of our doctors had been out for an extended period of time and the practice net was directly impacted.

Disability insurance for the partners is something we do not have. Maybe you are reading this and reflecting upon how smart you are because you are covered. For us, we are beginning the process of looking into this simple coverage for the unfortunate and unlikely event of partial or full disability of a high-producing partner.

Most of you are like me and my partners, adding insurance seems like another unnecessary expense. However, when you go an extended period of time without one of your doctor’s production, you quickly rethink the impact disability has on the practice.

The views expressed are those of the author and do not necessarily reflect the views of the AOA.

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