Or, more to the point, does part-time work equal less risk?
I’m sure there are a lot of part-timers who would argue that case! And they would have a point. After all, doing less work, and providing fewer services during any given policy term, seems like it would naturally lower the risk of having a claim. That’s just simple math, isn’t it? A part-time practice should definitely get a discount.
Not so fast.
There’s another side to that coin. Some would argue that doing less of a thing leads to being “less” good at it. Practice makes perfect, after all. So a part-time practice would actually be riskier. Less practice, less “perfect,” more claims. Under that simple logic, any part-time practice should be surcharged, right?
Simple Math, Simple Logic, Complicated Answers.
This would seem to be the perfect situation to let the data speak for itself. We could take a credible number of part-time practitioners and follow their loss history for a decade or so and thereby find the answer, credit or debit. Well, that’s just what malpractice insurers have been doing for a long time now (40+ years). And yet…the outcome is still fuzzy!
Unfortunately, this simple question has been answered differently by different companies. For some insurers, their claims data (frequency & severity) for part-time practitioners provided clear evidence that part-time is riskier than full-time. Their response was to cease offering insurance to part-timers altogether. For others, the look at their own data revealed that part-timers were no better or worse than full-timers at all. Those companies dropped any special part-timer discount but continued to insure them at standard full-timer rates.
And, if you happen to be a part-time practitioner, I have even more good news. There are even a few companies whose actuarial work supported the conclusion that part-time is indeed less risky than full time. These few companies still have part-time programs with special credit.
The message here is for all practitioners. Companies will follow where the data takes them for all areas of practice, in all states and in all practice configurations. The data is always evolving, and interpretation will always play a factor. What that means for you, is that things will always change…it’s the only constant.
The Good News:
While the overall data over the decades will naturally affect your premiums, your own risk factors are within your control. We talk extensively in this blog about ways to minimize your own risk of a claim so that you, at the very least, can be a data point in your own favor!
Read this post (www.mainstreetlawyersinsurance.com/predicable-rates-mean-happy-lawyers/) to learn more about how data affects rates.
Or start with this post (www.mainstreetlawyersinsurance.com/risk-management-tips-from-mainstreet/) to read up on our Malpractice Avoidance 101 series.