There are two kinds of doctors in this world: those who have been sued, and those who will be. The thought of being sued—just the thought—is enough to make you lose sleep. No matter how careful you are, or how friendly you are, you can always be sued by anybody for just about anything.
As a physician, you can’t help worrying that maybe your last patient had a retained sponge or that you missed something when you read her film, right?
According to The New England Journal of Medicine, 7% of physicians are sued in the average year but 78% of those claims will not result in a payment, leaving a tiny 1.6% of claims leading to negative economic outcomes for the physician before their insurance company begins to mop up the mess. (Note: I’ve seen the emotional damages done to physicians who were sued but found to be completely innocent, and I’m not discounting that at all.)
So you might get sued over your work but you’ve got bigger things to worry about, for sure.
Well, you’ve probably got a MUCH bigger liability that you’ve never considered, or maybe even ignored.
What do I mean?
You spent a dozen years studying like crazy to become the best in your class. In med school you shut down the library while your business school buddies shut down the bar. Then you spent sleepless nights in residency honing your craft, then more time in fellowship making sure you’d do a perfect job of cutting along the dotted lines.
So now, you’re ready for anything you encounter in the clinic or the O.R. but you’re probably not ready for the other bad outcomes.
Let me ask you a question: How long did your spouse spend studying and training to get his driver’s license?
He was just 16 years old, right?
Hormones racing, thoughts of hot dates dancing in his head. Parallel parking was his only nemesis. And he passed the test… the second time.
Is he a Board Certified Drivingologist?
Not hardly. Even today, he’s probably got a lead foot.
Is he required to pass a rigorous recertification every few years?
You would never try to fire off a text while you’re trying to tackle an aortic aneurism but he might tap out a text while he’s speeding through a school zone.
In fact, the National Safety Council tells us there’s a 1 in 84 chance of having an auto accident, and you can double that if you’re married. If you have a “bad outcome” in one of those accidents, then you’re likely to be sued without ever touching a patient.
So it’s time to look at the big picture when it comes to life’s liabilities.
In the lives of most physician families, there’s this huge focus on the risk of malpractice that draws attention away from other areas where there is obvious risk but it’s best to look at ALL the risks when you do your financial planning.
Stop and ask yourself:
- Who pays when one of us creams someone while driving, and how much might it cost?
- If someone trips and falls on our lawn, will our homeowner’s insurance cover that?
- How big is our personal lines ‘umbrella’ policy (PLUP) and will it cover damages AND defense?
- Are we maxing out accounts that shelter our assets from bankruptcy (like IRA’s, 401k’s and 529 Plans)?
- Whose name is on the title of the car our kid (or our nanny) drives?
- If the non-profit where you volunteer gets sued, are you personally liable?
- Who is named as the landlord on the lease agreement for our rental property?
There’s more to asset protection and risk management than meets the eye, so it’s important to look at all the risk factors… not just the scariest one.