Medical Billing Business Insurance
Getting insurance for your medical billing business is essential.
Medical billing businesses need to be protected against things like claims of breach of contract, privacy violations, and professional malpractice.
For example, a customer suffers financial harm as a result of your business’s failure to bill them, or your business suffers a cyberattack that leaks your clients’ confidential information.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Medical Billing Business
General liability insurance is — generally speaking — one of the most important insurance policies for medical billing businesses.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Other important insurance policies for medical billing businesses include:
- Professional liability insurance: Useful in cases where clients sue your business on the basis of negligence.
- Commercial property insurance: Provides financial help if business property is damaged or destroyed in a fire or other natural disaster.
- Workers’ compensation insurance: All states require that businesses with at least one payrolled employee carry this policy.
There are two types of insurance providers to bear in mind while looking for business coverage for your medical billing business:
- Traditional brick-and-mortar insurers
- Online insurers
In general, we recommend online insurers because they offer a great balance between value for money and the quality of the insurance.
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Cost of General Liability Insurance
On average, medical billing businesses in America spend between $400 - $700 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a medical billing business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Medical Billing Business
Example 1: While visiting your place of business, a potential client slips on wet tiles in the restroom, breaks an arm, and demands your business pay for his medical treatment. General liability insurance would cover his medical expenses.
Example 2: A competitor sues your business for libel. While you’re uncertain what you may have done to warrant the lawsuit, you know you need a lawyer to protect your interests. General liability insurance would pay for your legal defense and any required settlement.
Example 3: When one of your employees accidentally knocks a delivery driver to the ground, the driver breaks a wrist and decides to sue your business for damages. General liability insurance would pay for your legal defense and any required settlement.
Other Types of Coverage Medical Billing Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Professional Liability Insurance
While you strive to ensure your medical billing services make your clients’ business operations easier and more predictable, there’s always a chance someone might decide you made a mistake and caused them harm. If a client sues your business for negligence, professional liability insurance would cover your legal fees and any required settlement.
Commercial Property Insurance
You made a major investment in the equipment, supplies, hardware, software, and real estate necessary to run your business. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building and the business materials stored there.
Workers’ Compensation Insurance
Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a workplace accident.
Commercial Umbrella Insurance
While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your medical billing business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Medical Billing Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Yes. The reason for this is that your medical billing business will be exposed to risks from the first day of its operation, and business insurance is only useful when bought in advance.
That being said, only certain policies are actually obligated by law (e.g., commercial auto and workers’ compensation insurance).
Not necessarily. Certain exceptions may be written directly into your medical billing business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.