Hospital Insurance Policy Information
Hospital Insurance. Hospitals play an indispensable role in public health by making diagnoses, treating acute traumas, performing surgeries may save lives or improve them, and proving a broad range of additional services that may include, for example, dermatology and physical rehabilitation programs.
Hospitals and infirmaries provide medical treatment to patients on an outpatient or inpatient basis. Medical facilities include patient rooms for in-house treatment and care, medical testing laboratories, pharmacies, surgery or operating rooms, and access to both doctor and nursing care at all times.
While some hospitals support all types of medical care, including emergency medical assistance, others limit their services to such specialties as burn treatment, cardiology, intensive care, neurology, obstetrics/gynecology, oncology, orthopedics, pediatrics, psychiatry, radiology, spine treatment, or weight loss.
Many hospitals have cafeterias or restaurants, gift shops, and waiting areas for visitors. Some offer additional services such as counseling, health classes, libraries, religious services, and lodging for guests.
A hospital may be funded by charitable or religious organizations, Medicaid, Medicare, or private insurers. Some are teaching hospitals that provide training to medical students while offering lower-cost services to patients.
An infirmary is normally not as elaborate as a hospital; however, it does provide the same basic services on a more limited basis.
Some hospitals provide specialized care to certain populations, such as children's hospitals and military hospitals, while general hospitals typically have trauma centers (emergency rooms).
Infirmaries are, in contrast, technically any treatment facility - including temporary field hospitals. Today, any facility that refers to itself as an infirmary is most likely to either be a small hospital or a clinic within a larger hospital.
Hospitals and infirmaries have the goal of saving lives and improving patient health, but they by nature face a slew of unexpected circumstances.
While carrying the right policies is vital for all commercial ventures and governmental institutions alike, it is of special importance to hospitals and infirmaries. What types of hospital insurance coverage might these facilities need?
Hospital insurance protects your medical facility from lawsuits with rates as low as $147/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked hospital insurance questions:
- What Is Hospital Insurance?
- How Much Does Hospital Insurance Cost?
- Why Do Hospitals Need Insurance?
- What Type Of Insurance Do Hospitals Need?
- What Does Hospital Insurance Cover & Pay For?
What Is Hospital Insurance?
Hospital business insurance is a type of insurance coverage specifically designed for hospitals and other healthcare facilities. It provides financial protection against risks and losses associated with running a healthcare business, such as liability for medical malpractice, property damage, and worker injury.
The coverage may also include protection for income loss in the event of a business interruption due to a covered event. The exact type of coverage and policy limits vary, but it is an essential component of a comprehensive risk management strategy for any healthcare facility.
How Much Does Hospital Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small hospitals ranges from $147 to $239 per month based on location, size, revenue, claims history and more.
Why Do Hospitals Need Insurance?
The many perils hospitals and infirmaries could be confronted by all illustrate how essential it is to be properly insured - almost without exception, the perils health care facilities are vulnerable to are extremely costly.
Hospitals and infirmaries face some of the same risks shared by other kinds of businesses, of course. They would include acts of nature (wildfires, hurricanes, serious floods, storms, tornadoes, and others), theft and cyber theft, vandalism, and the possibility of sudden equipment malfunction, whether it pertains to elevators or MRI machines.
Since hospitals are by nature frequented by already at-risk people, however, the consequences could be even more severe than they would be for other commercial ventures.
health care facilities further have considerable liability risks. An employee could become injured on the job, including, for medical staff, in ways that exposes them to dangerous pathogens. Despite a surgeon's best efforts, poor patient outcomes can occur, and sometimes lead to costly, drawn-out, malpractice lawsuits.
Medical facilities simply could not continue to function for very long without comprehensive hospital insurance, which protects them from the financial consequences of all perils they are likely to encounter.
What Type Of Insurance Do Hospitals Need?
Each hospital is unique. The scope of the medical care they provide, how busy the facility is, how many employees they have and what their profession is, the jurisdiction in which the facility is based, and even geographical and climate factors all impact the risk profile of a hospital or infirmary.
Therewith, these variables determine the facility's insurance needs as well. A seasoned commercial insurance broker who specializes in the health care sector is an invaluable partner in deciding what insurance policies are best for a health care institution.
We can, however, provide a general overview of the most important types of hospital insurance for medical facilities:
- Commercial Property - This type of insurance is of a general nature; any business should carry it, as it provide coverage for the building and the physical assets therein in case of common perils such as acts of nature (typically excluding floods), theft, vandalism, and certain accidents (such as the accidental starting of a fire).
- Commercial General Liability - Another essential form of hospital insurance, general liability helps cover legal fees resulting from bodily injury and property damage claims occurring after commonplace scenarios. That means this form of insurance would cover harms a hospital caused or neglected to prevent only if those harms could have taken place almost anywhere - such as slipping on a wet floor or accidental damage to vehicles in parking lots.
- Hospital Medical Malpractice - This type of insurance covers the legal and settlement costs related to allegations of wrongful diagnosis, incorrect treatment, or medical negligence. Just as individual physicians must carry medical malpractice insurance, hospitals and infirmaries require coverage for the whole facility.
- Workers Compensation - Hospital staff could be injured in any number of ways. If the hospital or infirmary is in any way responsible, workers comp replaces any lost wages while they recover, and also provides funds for their medical bills.
These four types of coverage are important to any hospital or infirmary, but these facilities may have many additional needs - in the form of cyber insurance, auto insurance, and business interruption insurance, to name but a few.
Commercial insurance agents who specialize in the health care field are dedicated to finding the best possible type of hospital insurance coverage for these important healthcare facilities.
Hospital's Risks & Exposures
Premises liability exposure is high due to a large number of visitors to the premises and the impaired physical mobility of patients. Public and life safety code compliance is very important.
Excellent housekeeping is required to reduce the number of trips, slips, and falls. Spills must be cleaned up promptly. Hallways, rooms, and recreational areas must be orderly and well maintained.
Stairways, elevators, railings, and floor coverings should be in good condition. Exits should be clearly marked and free of obstacles. Adequate interior and exterior lighting should be available in the event of a power outage. Steps must have rails, be illuminated, marked, and in good maintenance and repair.
There should be a temperature-monitoring device in all bathing and showering areas to prevent scalding.
Parking lots should be maintained free of ice and snow. A major concern in the area of patient safety is the type of backup facilities available for power outages and loss of normal utilities. Emergency generators should be in place, checked and maintained periodically.
Security at the facility, as well as in the building, corridors, and any owned parking area needs to be carefully checked and reviewed because the facility may be held liable should a patient or visitor be attacked on the premises.
Should an emergency situation arise, there should be evacuation plans in place to quickly move patients to a safe area. Personal injury exposures include discrimination, invasion of privacy, and wrongful eviction.
Maintaining a patient's privacy is critical. Examination rooms, check-in and checkout stations must be in private areas so one patient cannot view information or overhear conversations regarding another patient's confidential information. Inappropriate touching and sexual misconduct must be considered.
Background checks should be conducted before hiring any employee. The hospital should be accredited and operate within the guidelines of that accreditation. If it is on probation, there should be active plans to comply with open recommendations to be taken off probationary status.
Environmental impairment exposure is significant due to the potential for contaminating the air, ground, or water supply by improperly disposing of medical waste, including contaminants such as hepatitis B or the AIDS virus. Disposal must be documented and meet all FDA and EPA standards.
Professional, medical malpractice, and directors and officers exposures are very high. Staff turnover is high, disrupting continuity in patient care. The exposure increases if the facility fails to conduct thorough background checks to verify employees' credentials, education, and licensing.
Hospitals should be subject to regular inspections by their accreditation organization. It should also be licensed and staffed based on federal and state requirements. The staff/patient ratio should be sufficient to provide adequate care for patients. Supervision is essential along with regular training, monitoring, and well-written and followed procedures.
Patients must be informed as to their rights to obtain or refuse medical care as described by state and federal law. Very serious losses may result from failure to secure patient approval before performing procedures.
Access to patients' records must be restricted to those having a legitimate reason for viewing them. Medical records must be duplicated and stored off-site. Both on-site and off-site records must be safeguarded to protect patients' right to privacy.
Patient plans should be in place and followed by all staff members. Only patients who are within the appropriate level of care within the hospital's license should be admitted and allowed to remain in the facility.
Needles and other equipment must be sterilized and sanitized to prevent the spread of blood-borne infectious diseases such as hepatitis, HIV and AIDS. There should be a formal review process in place for reviewing all incidents that may give rise to a claim of medical malpractice. The hospital environment can lend itself to the spread of diseases like MRSA if not handled immediately.
Access to all pharmaceuticals must be carefully controlled, with procedures in place for the proper dispensation to patients. Finally, inappropriate touching and sexual misconduct must be considered.
Workers compensation exposure comes from contact with patients, from infections, and from communicable diseases such as hepatitis, HIV, AIDS, or MRSA. Employees should have access to vaccinations to prevent diseases. Gloves and masks should be worn at all times when working around any bodily fluids. All CDC recommended procedures for handling bodily fluids must be followed.
Constant cleansing with disinfectants can result in the lung, eye, or skin irritations and reactions. Accidental piercings from needles and cuts from scalpels are common. X-ray technicians should wear leaded aprons to limit exposure to harmful radiation.
Back injuries, sprains, and strains can occur when assisting or lifting patients. Procedures should be in place for safely handling unruly or violent patients to minimize injury to both the patient and the employees.
Slips and falls can occur from tripping over objects or slick floors. Kitchen work includes the possibility of cuts, scrapes, and burns. Because patient information and billings are done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.
Property exposures are extensive. Ignition sources include electrical wiring, heating, and air conditioning systems, diagnostic and treatment equipment, laundry equipment, and cooking appliances. All electrical wiring must be up to code and equipment properly maintained. Licensing and certification ensure that housekeeping is excellent and that controls are in place for patient safety.
Smoking is not permitted in hospitals and that ban must be enforced. There should be smoke detectors installed in all patient rooms and common areas. Oxygen and other surgical gases in use around the hospital are flammable and must be controlled. Even a small fire can cause extensive damage due to the requirement of a sterile environment.
All kitchen grills and deep fat fryers must have fire extinguishing protection, hoods, and filters. There should be automatic fuel shut off valves and adequate hand-held fire extinguishers.
Theft is a major concern because of the large quantities of drugs stored on premises. Tight controls must be in place including, but not limited to, inventory control and limited access to the drug room.
Business income and extra expense losses can be severe due to the cost of diagnostic equipment, the time it may take to repair or replace a damaged item, and the unavailability of backup facilities.
Equipment breakdown exposures are high as operations are dependent on medical equipment being available. All equipment must be maintained regularly.
Crime exposure comes from both employee dishonesty and money and securities. The potential for theft, directly or by means of identity theft, is great. Pre-employment checks, including criminal background checks, should be required for any employee with access to drugs or money. Inventory must be reviewed regularly and the drug areas must have limited access.
Regular monitoring with cameras can be helpful in deterring employee theft and monitoring patient treatment. All ordering, billing, and disbursements must be handled as separate duties. Regular inventories and audits must be conducted.
Money and securities can be a concern if payments are accepted on premises. Deposits should be made regularly and no money kept on premises overnight. Patients' property may be stolen by employees.
Inland marine exposure comes from accounts receivable for billings, computers, medical equipment, and valuable papers and records for employees', patients' and vendors' information. Most medical equipment is now run by computers and should be covered on a computer form. Some medical equipment may be shared with other facilities or be kept in mobile care units, requiring separate coverage as it is transported between locations.
Equipment being transported must be adequately secured to prevent movement during transit. All records should be duplicated and a copy kept off premises. There may be a bailees exposure if the hospital takes custody of the goods of others, such as laundry. Some hospitals may have extensive fine arts and statuary that should be covered under a fine arts form.
Commercial auto exposure is high because of the use of emergency vehicles and transportation of patients, officials, guests, and visitors because some may have an existing injury or have limited mobility. If there are owned vehicles, all drivers should be licensed with acceptable MVRs.
Vehicle maintenance should be ongoing and documented in a central location. Ambulance drivers must be trained to notice surroundings, particularly when going through congested traffic and intersections. If the ambulance service is contracted out, the hospital should require certificates of insurance from each provider.
What Does Hospital Insurance Cover & Pay For?
Hospitals may be sued for a variety of reasons, including medical malpractice, negligence, wrongful death, and breach of patient confidentiality, among others. In some cases, a hospital may be held liable for the actions of its employees or medical staff.
Medical malpractice is a common reason for hospitals to be sued. This occurs when a healthcare provider, such as a doctor or nurse, fails to provide appropriate care or treatment to a patient, resulting in harm or injury. For example, if a surgeon makes a mistake during a procedure, resulting in a patient's injury, the hospital may be sued for medical malpractice.
Negligence is another reason for hospitals to be sued. Negligence can occur when a hospital fails to maintain a safe and clean environment, resulting in injury or illness to patients or staff. For example, if a hospital fails to properly clean a patient's room, resulting in the patient contracting an infection, the hospital may be sued for negligence.
Wrongful death is another common reason for hospitals to be sued. Wrongful death occurs when a patient dies as a result of the hospital's negligence or medical malpractice. For example, if a patient dies during surgery due to the surgeon's mistake, the hospital may be sued for wrongful death.
Breach of patient confidentiality is another reason for hospitals to be sued. This can occur when a hospital or its employees release a patient's confidential medical information without the patient's consent. For example, if a hospital employee releases a patient's medical records to a third party without the patient's consent, the hospital may be sued for breach of patient confidentiality.
Insurance can help protect hospitals from the financial burden of lawsuits. Hospitals typically carry medical malpractice insurance, which provides coverage for claims arising from medical malpractice. This insurance can help pay for legal fees, settlement costs, and judgments in the event of a lawsuit.
General liability insurance can also help protect hospitals from lawsuits related to negligence, wrongful death, and breach of patient confidentiality. This insurance provides coverage for claims arising from injuries or damages that occur on the hospital's property or as a result of the hospital's operations.
In addition, cyber liability insurance can help protect hospitals from lawsuits related to data breaches or other cyber incidents that result in the release of confidential patient information. This insurance provides coverage for legal fees and other costs associated with responding to a cyber incident, as well as damages awarded in lawsuits resulting from the incident.
Overall, insurance can play a crucial role in protecting hospitals from the financial impact of lawsuits, allowing them to focus on providing quality care to their patients.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8062 General Medical And Surgical Hospitals, 8063 Psychiatric Hospitals, 8069 Specialty Hospitals, Except Psychiatric
- NAICS CODE: 622110 General Medical and Surgical Hospitals, 622210 Psychiatric and Substance Abuse Hospitals, 623210 Residential Intellectual and Developmental Disability Facilities, 623220 Residential Mental Health and Substance Abuse Facilities, 622310 Specialty (except Psychiatric and Substance Abuse) Hospitals
- Suggested Workers Compensation Code(s): 9040 Hospital - All Other Employees, 8833 Hospital - Professional Employees
Description for 8062: General Medical And Surgical Hospitals
Division I: Services | Major Group 80: Health Services | Industry Group 806: Hospitals
8062 General Medical And Surgical Hospitals: Establishments primarily engaged in providing general medical and surgical services and other hospital services. Specialty hospitals are classified in Industries 8063 and 8069.
- General medical and surgical hospitals
Description for 8063 Psychiatric Hospitals
Division I: Services | Major Group 80: Health Services | Industry Group 806: Hospitals
8063: Psychiatric Hospitals: Establishments primarily engaged in providing diagnostic medical services and inpatient treatment for the mentally ill. Establishments, known as hospitals, primarily engaged in providing health care for the mentally retarded are classified in Industry 8051.
- Mental hospitals, except for the mentally retarded
- Psychiatric hospitals
Description for 8069: Specialty Hospitals, Except Psychiatric
Division I: Services | Major Group 80: Health Services | Industry Group 806: Hospitals
8069 Specialty Hospitals, Except Psychiatric: Establishments primarily engaged in providing diagnostic services, treatment, and other hospital services for specialized categories of patients, except mental. Psychiatric hospitals are classified in Industry 8063.
- Alcoholism rehabilitation hospitals
- Cancer hospitals
- Children's hospitals
- Chronic disease hospitals
- Drug addiction rehabilitation hospitals
- Eye, ear, nose, and throat hospitals: in-patient
- Hospitals, specialty: except psychiatric
- Maternity hospitals
- Orthopedic hospitals
- Rehabilitation hospitals: drug addiction and alcoholism
- Tuberculosis and other respiratory illness hospitals
Hospital Insurance - The Bottom Line
To learn more about the specific types of hospital insurance policies your facility needs - along with the coverages, exclusions and costs - consult with a reputable broker that is experienced in commercial insurance for medicine.
Additional Resources For Medical Insurance
Discover small business insurance for medical and dental professionals. Medical malpractice insurance is a type of professional liability that protects health care professionals from liability causing in bodily injury, medical expenses and property damage.
- Ambulatory Surgical Center
- Art Therapy
- Assisted Living Facilities
- Blood Banks
- Dental Lab
- Dental Office
- Diagnostic Imaging Centers
- Health Maintenance Organizations
- Healthcare Facilities
- Home Medical Equipment Dealers
- Marriage & Family Therapy
- Medical Clinics
- Medical Laboratories
- Medical Marijuana Dispensary
- Medical Practice
- Medical, Surgical & Hospital Supply Store
- Mental Health Counseling
- Nurse Registry
- Occupational Therapy
- Osteopathic Physicians
- Physicians Office
- Plastic Surgeons
- Skilled Nursing Facilities
- Speech Therapy
- Substance Abuse Counseling
- Telemedicine Business Insurance
- Specialty Medical Centers And Clinics
- Specialty Medical Malpractice
The medical industry is a crucial sector that plays a vital role in ensuring the health and well-being of individuals. It is a complex and highly regulated industry that requires specialized knowledge and expertise. As a result, the medical industry is exposed to a variety of risks, including legal and financial liabilities.
One of the main reasons why the medical industry needs commercial insurance is to protect against medical malpractice. Medical malpractice occurs when a healthcare provider deviates from the standard of care and causes harm to a patient. It can lead to costly lawsuits and significant financial losses for the healthcare provider. Business insurance helps to cover these costs and protect the financial stability of the medical facility.
Another reason the medical industry needs business insurance is to cover the cost of regulatory fines and penalties. The medical industry is subject to strict regulations and any violations can result in significant fines and penalties. Business insurance helps to cover these costs and protect the financial stability of the medical practice or facility.
In addition, the medical industry is vulnerable to data breaches and cyber attacks. These incidents can result in significant financial losses and reputational damage for the medical facility. Business insurance helps to cover the cost of recovering from a data breach or cyber attack and helps to protect the reputation of the medical facility or practice.
Overall, business malpractice insurance is an essential component of the medical industry. It helps to protect against the financial and reputational risks associated with the medical industry and helps to ensure the financial stability and success of medical practices and facilities.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Physicians and Surgeons Floater, Valuable Papers and Records, General Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Cyber Liability, Employment-related Practices, Business Automobile Liability and Physical Damage and Stop Gap Liability.