INDIVIDUAL PHYSICIANS

Protecting the Practitioner: Insuring Your Career, Your Assets, and Your Peace of Mind

While a medical practice operates as a business entity, its success and its risks are intrinsically tied to the individual physicians who own and lead it. As high-net-worth professionals in a litigious field, physicians are frequent targets of legal and regulatory actions.16 The corporate veil of the practice offers a degree of protection, but significant personal financial and career risks remain.

A micro-captive insurance company, when properly structured, serves as a powerful shield for the individual physician-owner. It moves beyond protecting the enterprise to insuring the practitioner's personal assets, professional standing, and long-term ability to earn an income. For an individual physician, the greatest uninsurable risk is often not a single malpractice judgment, but the devastating financial and professional consequences that arise during the process of defending against claims, audits, and inquiries, even when no fault is ultimately found. A captive is uniquely capable of insuring the financial impact of these processes.

Reinforcing Your Malpractice Defense

Funding High Malpractice Deductibles

To manage the high cost of malpractice insurance, physicians often carry substantial personal deductibles.
A captive allows the practice to formally insure this deductible amount.
The practice pays a tax-deductible premium to the captive, which then holds the funds to reimburse the physician for any out-of-pocket deductible payment.
This converts a potentially catastrophic personal expense into a planned, tax-advantaged business cost.

Providing Excess Liability Coverage

In the event of a judgment that exceeds the limits of a commercial malpractice policy, a physician's personal assets are at risk.
A captive can be structured to provide a significant layer of excess liability coverage, acting as a financial firewall that protects personal wealth from professional liability.

Controlling Legal Defense

Commercial insurance policies can sometimes contain clauses that limit a physician's control over their own legal defense or may compel a settlement against the physician's wishes.
A captive policy can be written to cover legal defense costs that are excluded or limited by the primary policy, giving the physician greater autonomy and resources to mount a vigorous defense.

Loss of License Insurance

A state medical board inquiry or other regulatory action can lead to the suspension or revocation of a physician's license to practice.
This is a catastrophic career event with devastating financial consequences.
A captive can issue a policy that provides income replacement for a defined period if a physician's license is involuntarily suspended, offering a financial bridge during a challenging time.

Reputational Damage Insurance

A physician's reputation is paramount to their ability to attract and retain patients.
A malpractice lawsuit (even one that is ultimately won), a negative media story, or a viral social media campaign can cause severe and lasting damage to a physician's practice and income.
A captive can write a policy that covers the quantifiable loss of personal income resulting from a specific, documented reputational event.

Administrative Actions Liability

Physicians can be held personally liable for fines and penalties arising from administrative or regulatory actions, such as those related to HIPAA or billing compliance.
A captive policy can be designed to cover these personal financial penalties, which are typically not covered by the practice's general liability or malpractice insurance.