Insurance Considerations 

 

Following is a summary of types of insurance that persons participating in and operating Primary Care Networks should consider. It is a general list of types of insurance and where and when they might be applicable. It is not intended to be an exhaustive list of insurance products, and Primary Care Network participants should contact their insurance consultants to assist them to assess insurance requirements for their specific and unique circumstances.

Property Damage

• Insures property and equipment that is used in the operation of a Primary Care Network (e.g., fire insurance for a building or collision insurance for an automobile)

Professional Liability

• Participating physicians will already have protection from professional liability through Canadian Medical Protective Association (CMPA)
• All professional service providers should be compelled to maintain professional liability coverage. This coverage may be available through the professional/regulatory organization for that service provider. If not, it will have to be obtained privately.

Comprehensive General Liability

• Insures against bodily injury, death or injury to or destruction of property of others, including loss of use or other consequential loss
• The template “letter agreement” between participating physicians and the non-profit corporation (NPC) requires that participating physicians hold this type of coverage.
• The NPC as a whole should also consider taking out comprehensive general liability insurance
• Should consider requiring all Primary Care Network service providers to carry this type of insurance

Workers' Compensation

• If a Primary Care Network service provider is working in an industry to which the Workers’ Compensation Act applies, he/she should be compelled to provide evidence of WCB coverage

Directors and Officers Liability

• Provides financial protection for directors and officers if they are sued in conjunction with the performance of their duties.
• Although steps should be taken to entrench in the constitution of the NPC an indemnity in favor of the directors, practically, the resources of the NPC may not be sufficiently adequate to entirely fund a claim under the indemnity. Accordingly, directors of the NPC should consider obtaining this type of insurance.

Life, Accident and Sickness/Disability

• Should be considered by all individuals. However, it may be too far reaching for the NPC to require participating physicians to take out this coverage
• Expert advice should be sought before consideration is given to taking out such policies, to ensure they are duly established and maintained in a tax-efficient manner

Crime

• Covers robbery, burglary, employee dishonesty and vandalism

Key-Person

• Insurance on the life of the person within an organization that may be considered key to the continued successful operation of the organization

Product Liability

• Protects against defective merchandise

Fidelity Bonds

• Can be placed on employees with access to money, and cover loss from embezzlement

Business Interruption

• Covers against loss of earnings during a temporary halt in business caused by a disaster, such as fire or theft

In addition, it should be noted that, although insurance is one way of addressing business risks, it is important to combine insurance with a program of continuous risk assessment and reduction by seeing that proper systems are implemented and updated from time to time. Areas warranting focus include loss prevention, hiring and employment practices, supervision methods, establishment of operating plans and procedures, and continuing education. Additionally, any contracts the NPC enters into with others should contain, along with the other usual provisions, the following:

• a limitation of liability and indemnity clause in favor of the NPC
• an obligation on the part of the service provider to place and maintain adequate insurance
• an ability for the NPC to terminate the contract on reasonable notice
• an ability for the NPC to terminate the contract immediately should funding to the Primary Care Network be discontinued

 Insurance Considerations for Primary Care Networks