Shark Tank’s Mr. Wonderful, aka Kevin O’Leary, loves cash flow, so much so that he over-emphasizes its pronunciation. And if cash is king (and Kevin sure thinks so), then cash flow is queen, especially during retirement. Cash equivalent resources can really make your golden years more enjoyable than living under a tight-fisted monetary policy because you can’t spend your monies dedicated to income. At the same time you don’t want your cash money to rot in low yielding passbook accounts that can’t even keep up with the real cost of goods and services. There are some choices to consider for cash flow management to service emergencies, medical deductibles and investment opportunities. Besides the best interest rates credited to your money, principle preservation is a key component in selecting cash management accounts: Transaction Accounts, Savings Accounts, Government Issued Bonds and Fixed Rate Annuities. The various elements of an asset management account may or may not be protected by federal deposit insurance. For example, funds kept in a bank checking account are usually protected by federal deposit insurance. Dollar amounts kept in a money market fund, however, are not protected by government deposit insurance. One thing in life is certain. Things happen.   Read more…

Before addressing key personnel, a business should address their overhead or essential costs of doing business. Disability Overhead Insurance You may have personal disability insurance that replaces some of your personal income if you are disabled, but what about the cash flow you and other key employees or partners generate for your business? How long would the practice be solvent and stay open without it? You should know who produces what dollars in your practice and be realistically insured if yourself or another key producer can’t work for some period of time so that your practice remains solvent, and to avoid having to go into your savings (or worse, into debt) to keep it open. This distinct coverage, referred to as Disability Overhead Insurance does just that and should be adequate to cover all the fixed monthly expenses your production covers. Key Person Disability Insurance Closely related to the coverage above is coverage for the loss or incapacity of key employees who either are themselves big producers or perform vital functions that allow you to produce. This insurance benefit helps cover any temporary income loss and the costs of locating, recruiting, and training a suitable replacement. Premium costs vary with the size of your   Read more…

You need to indemnify yourself both professionally and personally if you have responsibility as a board member or officer of a company. Legal costs are expensive for management personnel who become board members or officers of an organization. Even a benevolent board position with your favorite charity could expose you to unforeseen liabilities. Many companies have formal articles of incorporation that indemnify their officers or board members against any legal liability from litigation against the company, but those article of incorporation are not bullet-proof. Just like any other business owner or executive, physician practice owners and managers have significant personal liability for their acts, omissions, and compliance as owners, directors, officers, etc. of a corporation. This is separate and distinct from their malpractice coverage and is regardless of the title they hold or don’t hold. If it’s your practice and you are the actual authority, the liability is yours. Again we suggest mid-six to seven figures in this coverage area as well. You should also have this coverage from every board of a corporation, foundation, school, religious institution etc. you have a position with. The content in this press release was taken from Ike Devji’s article Common Flaws of Asset Protection Planning   Read more…

Data Breach/Cyber Liability The exposure of either HIPAA protected or PII (patient identifying information) is  both a significant legal liability and PR nightmare. As an example, all medical practices should be adequately insured against all forms of this type of exposure including; hacking, loss or theft of devices with sensitive information and intentional theft by employees. Many doctors we speak with have somewhere between $0 and $50K in coverage as part of another policy, which is shockingly inadequate. Again, shoot for seven figures in coverage. You need to install protocols and back up systems to protect client information from outside invasion as well as insider theft. Employee theft of client information is on the rise and is a present danger for corporations that collect medical and financial data from their clients and customers. RAC Audit Insurance The Recovery Audit Contractor program also known as a “RAC Audit” seeks to identify and eliminate fraud and waste in Medicare payments. While some audits are routine and require only minor corrections, others are much more serious, requiring civil and even criminal legal defense, crippling levels of document production (they can request new files every 45 days), and forensic review. A controversy during this process can   Read more…

One of three vital steps to protect your medical practice from the very common exposure of an employment related lawsuit is to have Employment Practices Liability Insurance or EPLI. As an employer, you are responsible for not only your own interactions and compliance with employment law, but for everything employees do with the public and each other. I recommend having at least $1 million in coverage in this area, as legal defense costs alone can be six figures, as are many awards. EPLI covers wrongful acts of employees as well as claims of wrongful termination, sexual harassment or discrimination. But it doesn’t stop there. The list includes, but is not limited to: defamation of character, privacy breaches, being passed over for a promotion or even the lack of an employee evaluation. Evaluation can actually be defined on broader terms by being deprived of a career opportunity. One of the largest exposures could be the breach of the employment contract. It could include human resources where the management of employee benefits was poorly overseen. Most EPLI policies will cover legal costs whether the employer wins the suit or not. But it generally doesn’t cover civil or criminal fine assessments or punitive damages.   Read more…

Key Points to Remember: Umbrella policies are not magic shields against anything that might happen, no matter how much it costs. They are an essential first line of defense and the most cost effective and basic first step in your asset-protection plan. In many cases a one million dollar umbrella can cost just a few hundred dollars a year. They have limits that are very clearly defined by the insurance company. If the personal liability umbrella, the one that’s typically related to your home and auto coverage, is what you are considering, it probably won’t cover issues not reasonably related to either of those base policies in most cases. So, for example, a dog bite that occurs at your home may be covered, but a lawsuit by an employee almost certainly will not. My advice to clients is buy every dollar of insurance you can reasonably afford for as many reasonably predictable risks as possible. Assume there will be a gap in the coverage at some point so be certain that you’re personal assets are organized and protected. Implement an asset-protection plan that legally separates your personal and professional assets and liabilities today, while you still have right to do so. I get dozens of   Read more…