On top of the economic upheavel, natural disasters have also taken their toll on the market. There were six major storms in 2008, including Hurricane Ike, which cost insurance companies an estimated $15 billion, says McDonough.

Writing between the lines


Insurance agencies and brokers specializing in the medical equipment industry offer several "lines" of property and casualty insurance available through insurance carriers. A business owner's policy can be tailored to the needs of an organization. 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 lines that can protect them from the financial losses associated with business interruption, equipment breakdown, computer viruses, and even HIPAA violation, to name just a few. Physician professional liability coverage is a separate entity, but many insurance providers who insure OEMs and ISOs also provide medical malpractice insurance for practitioners and facilities. Organizations should read the fine print and discuss the differences between the various policies available. Some policies may not be retroactive, while others may not extend past the sale or close of business.

In addition to underwriters who authorize insurance policies, agents who represent one primary carrier, and brokers who work with various insurance carriers, there are also risk management advisors who can help organizations better manage their risk and in some cases avoid over-insuring.

"Medical providers, like all commercial accounts, need to implement a risk management program," says Glass. "The goal is to protect the health care provider's assets, which increases profits. Ironically, good risk management techniques make the purchase of insurance the last resort to protecting one's assets. A risk manager is trained to transfer as much risk as possible to others, manage their past claims, avoid future claims through loss control and safety techniques, retain a portion of financial responsibility as a deductible and lastly, avoid a new product line or service if the exposure is too great. The risk manager then insures what is left."

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