Different Options
For any business dealing in the medical sales or service industry, an insurance policy should always be tailored to a company's specific needs.

"The biggest and most prominent exposure is product liability; protecting themselves against [potential lawsuits due to] bodily injury or property damage caused by the device that they sell or service," Schneider says. "We also offer other areas of insurance needed for business, including property, fire, automobile, worker compensation, shipping..."
Premises liability insurance is ideal for hospitals, imaging and surgical centers and professional liability insurance can protect OEMs and ISOs in the event of errors and omissions. For refurbishing, repair and maintenance ISOs, products and completed operations policies provide coverage in the event of damage or bodily injury due to improper calibration or insufficient maintenance on equipment; and most OEM and ISO insurers also offer inland-marine cargo policies to insure against damage to durable medical equipment during shipment to the end user.

Organizations may also choose from a long list of insurance types that can protect them from the financial losses associated with business interruption, equipment breakdown, computer viruses and even HIPAA violations.

The type of equipment one deals in is also important for figuring out rates. Someone working with MRIs is going to encounter different numbers than someone who deals with X-rays.

"With medical equipment, from a premium and ratings standpoint, the type of device is very important and does drive the rate premium," Schneider says. "There are recognized differences between exposures. There are imaging devices that are considered non-invasive, to products that are invasive, so it's a key element."

Tice offers the following example for why a company needs more insurance that just the general liability.

"Let's say you sell a piece of equipment to a customer and on the way to it being delivered in the truck, it gets damaged. Sometimes that repair requires replacements of what could cost $100,000. You need a cargo policy or inward marine policy to cover your goods and transit."

However, one size doesn't fit all and different companies handle their insurance needs in different ways.

"We only carry liability insurance at this time," says Bill Adkins, president of Palmetto, Fla.-based National X-Ray Corporation. "Our company-owned contents of the building are way too expensive to insure here in coastal Florida, if you can even find a carrier since we are located at a port and are in a flood zone. We no longer have a choice of good providers here and it takes a lot of work just to find an affordable provider."

More Industry Reports