What is errors and omissions insurance for acupuncturists?

More Americans are turning to alternative medicine to treat their ailments, which is good news for acupuncturists. However, with greater demand comes an increased chance of a lawsuit.

Errors and omissions (E&O) insurance, also known as professional liability insurance, covers the financial impact of lawsuits if someone accuses you of negligence, making a mistake, or failing to deliver promised results.

For example, if someone accuses you of using non-sterile needles that cause an infection, your errors and omissions insurance coverage would help cover the cost of a lawsuit or settlement.

Lawsuits can occur whether you run your own business, work as a contractor, or if you have employees and contractors working for you. If this happens, the right business insurance can be the difference between keeping your business afloat or liquidating it to cover costs. Let’s take a look at why E&O should be part of your insurance plan.

What are common reasons for lawsuits involving acupuncturists?

There are three scenarios that are most likely to result in a lawsuit for acupuncturists. These include a failure to refer, a failure to implement the proper technique, and a failure to properly sterilize equipment.

Failure to refer

If a patient discovers they have signs of melanoma or skin cancer, such as a cancerous mole, they might sue you if you had a chance to see this on their body but failed to notify them or offer a referral.

Failure to implement proper technique

This typically involves someone suffering from chronic pain because of a procedure, although it could also involve nerve damage or punctured vital organs.

Failure to properly sterilize equipment

If a patient develops an infection or a disease as a result of a procedure performed in your office, you could face an expensive lawsuit or settlement.

What’s the difference between E&O insurance and medical malpractice insurance?

It’s important to understand the difference between errors and omissions insurance and medical malpractice insurance.

E&O provides coverage for financial losses over a claim of negligence, oversights, and mistakes in your professional services. This is a type of liability insurance for yourself and your business in case a patient or customer accuses you of making a mistake that causes your acupuncture business financial harm.

In contrast, medical malpractice offers legal defense coverage for losses and medical expenses related to the human body, including claims of misconduct by physicians and other healthcare providers that results in a patient's injury or death.

Medical malpractice coverage is often required by state law for certain medical professions, while some business clients or government contracts may require proof of malpractice coverage, which can be provided via a certificate of insurance.

E&O insurance can be thought of as coverage that protects your acupuncture business activities, while medical malpractice relates more directly to patient care.

What’s the difference between E&O and general liability insurance?

General liability insurance offers protection against common business risks, such as customer injuries and advertising injuries. This coverage is often required to sign leases and secure contracts, and is often the first type of coverage that small business owners seek from their insurance company.

If someone slips and falls on a freshly mopped floor and gets injured, that would be covered under your general liability policy. Or, if someone sued you for slandering them in an advertisement, this would also be covered by general liability.

Your E&O coverage is more about professional negligence involving your services as opposed to customer injuries. Both are highly recommended if you rent or own property where customers will visit for acupuncture treatment.

E&O insurance for acupuncturists: How it works

Let’s take a look at what an acupuncture professional needs to know when shopping for an acupuncturist E&O insurance policy.

Claims-made coverage

Claims-made coverage stipulates that a policy must be active when an incident occurs and when the claim is filed with the provider. This prevents someone from buying a policy after an incident or after a lawsuit is filed.

For this reason, it’s imperative to maintain your coverage at all times, because a lapse in your E&O insurance could leave you vulnerable to legal fees and other expenses in case a lawsuit is filed against you. If you expect a gap in your insurance, it would be important to set a retroactive date for your policy, as it determines how far back in time an incident can occur for your policy to still protect you.

Deductibles and coverage limits

Should you ever face a lawsuit, the deductible is what you’ll pay out of pocket in order to receive funds to fight the lawsuit. If you have a $1,000 deductible, then you would have to pay the first $1,000 in legal costs out-of-pocket before your insurance would cover the rest of the claim. Your insurance will also have policy liability limits for how much it covers per incident and per policy period.

Let’s say your coverage limits are $1 million per incident and $3 million per policy period. If an individual claim exceeded $1 million, then you would pay the rest of the claim out-of-pocket. Likewise, if you had several claims whose aggregate exceeded $3 million in a year, then you would also pay that excess out of your own pocket.

Coverage gaps

There can be serious repercussions if you stop your E&O coverage for any period, or if you leave a gap in coverage when switching between providers. If you have a coverage gap or are switching providers, you might consider carrying prior acts (also called nose coverage) or tail coverage.

Prior acts coverage lets you make claims on incidents that happened while your policy was active, but hadn’t been reported. Tail coverage allows you to continue to file claims even after you ended coverage with your provider.

Contact a professional about acupuncturist insurance

Do you have questions about how insurance could protect your acupuncture practice and give you peace of mind? Send us an email or give us a call at (800) 688-1984, and you will receive a response promptly.

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