Errors & Omissions Insurance Complete Guide
Errors & Omissions (E&O) is coverage that protects a medical practice against claims that a professional service provided caused a client/patient to suffer financial harm due to mistakes (errors) or failure to perform a service (omissions).
Defending a practice in a civil suit with certain damages awarded, E&O insurance can cover the cost, even if the legal action is groundless. For medical facilities, E&O is required by law in many areas.
Errors and omissions coverage applies if a practice/facility includes any of the following:
- Managed care-related activities
- Utilization review
- Expert witness
- Billing operations
- Credentialing
- Surgery center/laboratory
- Consulting
- Claims review
- Medical director services
- Not for profit
- Management services
- Employee leasing
- Independent physician associations
- Miscellaneous and/or other ancillary activities not normal to a medical practice
What Is Covered in E&O Insurance
Most E&Os insurance coverage provide the following:
- Lawyer fees
- Court fees
- Administrative expenses such as documentation costs
- Settlement or the judgment claim awarded against the practice
How Much Does Errors & Omissions Insurance Cost
The cost of E&O insurance is dependent on many factors, such as:
- Practice size:A practice with a large number of professionals may be subjected to higher risk, and thus, higher costs will be involved.
- Revenue:When a practice generates a large amount of revenue, the risk is also large.
- Specialty: Some medical specialities may have higher chances of error and omission as compared to other specialities.
- Claim history: A practice with a history of suits will be required to pay higher insurance costs.
- Coverage limits: High coverage limits are accompanied by higher insurance costs.