Am I Still Covered if My Practice is Incorporated?
Will incorporating affect my malpractice insurance with NCMIC in any way? Do I need to purchase additional coverage?
Posted in Policy Features on Wednesday, January 23, 2019
QUESTION: I am a D.C. with two employees—an administrative assistant and a CA—on staff. My accountant recently advised me to incorporate for tax purposes. Will incorporating affect my malpractice insurance with NCMIC in any way? Do I need to purchase additional coverage?
ANSWER: In your situation, let’s say your CA is accused of injuring a patient during a treatment modality and the patient files a lawsuit naming just your corporation. Because your corporation is vicariously liable for the actions of your staff, you would need entity coverage in place to protect the practice against this claim.
Another situation where this could come into play would be if your practice pursues a collection action against a patient, and the disgruntled patient files a counter-claim against the clinic alleging some sort of malpractice. If your corporation is named in the counter-claim, you would need entity coverage in place to protect the practice against this claim.
While incorporating can affect your coverage, the good news is NCMIC offers a shared limits of liability entity coverage option at no additional premium. So, as the owner of a chiropractic entity, e.g., an LLC, partnership, corporation or other, you can share your limits of liability with your practice entity for no additional charge.
Many doctors don’t realize that merely forming a separate entity puts the practice itself at risk for being sued. Even as a sole practitioner your clinic may be named in a malpractice action if it is set up as a separate entity.
Plaintiff attorneys have access to various resources, such as Secretary of State websites, which can be used to query for entities associated with you and your practice. If an entity is found, it will likely be named in any malpractice lawsuit that is filed. If your entity is not named on your policy, NCMIC would not be obligated to provide a defense for the entity. This could potentially cost you thousands of dollars.
To better protect you and your practice, please contact NCMIC today at 1-800-247-8043. We will review your policy, analyze your situation and explain your options. The application for professional entity coverage is also available by logging in to the “My NCMIC Login” section of www.ncmic.com.