insurance file folder

How much insurance do you really need?

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

How much insurance do I need? We ask this question anytime we consider purchasing insurance of any kind.

On a recent family vacation I found myself wrestling with it. I was renting a Jeep to travel around the island with my wife and two boys. When my turn in line came, the friendly clerk asked if I wanted to get insurance for the vehicle. I froze. I was frustrated with myself for not researching the coverage my car insurance at home provides for rental cars.

You may consider disability insurance to secure your greatest investment: yourself.

I asked the clerk to explain what was covered. If I had a wreck, I would only be covered to a certain percentage, and that did not include accidents caused by my negligence. Coverage would cost an additional $19.95 per day. The "additions" continued until I couldn't take it anymore and decided to just take the risk. I accepted the accident coverage but declined many other add-ons. She turned the credit card screen around and showed me the total. "Better safe than sorry," I thought reluctantly. I signed. She handed me the keys.

Practice owners face similar difficult decisions. How much is too much? Do we really need all that coverage? These decisions will be based on the needs of your practice, so do your research before any purchase.

Malpractice insurance is not optional. General liability for the practice and building coverage are also must-haves. Many optometrists take it a step further and add umbrella coverage to the policy.

Cyber liability is also an up-and-coming insurance type. Practice owners are liable for any patient information stolen from them, whether physically or in the cloud, so this insurance provides protection.

You may also consider disability insurance to secure your greatest investment: yourself. Many optometrists are underinsured in this area, with policies that do not come close to replacing their current income in case of disability. A professional policy that covers you at maximum allowable income is extremely important.

When partners play a part

Optometrists with practice partnerships may have different needs. For example, in case one of the partners dies, the other partner or partners should be insured with the option to buy the deceased partner out, with proceeds going to the estate.

Disability insurance also comes into play within a partnership. I discovered this recently while having coffee with an individual who markets insurance. I was convinced I did not have a need that he could sell me on. Fortunately for him, he asked the right questions and found a weakness in my armor: disability insurance.

He asked what would happen if one of my partners became disabled or could function only at 50 percent? I answered that my partners have disability and should be covered if the unfortunate happened.

He turned the tables: What about you, Chad? How will the production of the practice be made up so you don't sink your practice net? It dawned on me that we would be in trouble. In fact, recently one of our doctors had been out for an extended period of time. The practice net was directly affected.

With the right information in hand, we are looking into this coverage addition. When you go an extended period of time without one of your partners' production, you quickly rethink how little or how much insurance you need.

December 2, 2013

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