Why Do I Need a Separate Medical Director Liability Policy?

Have you accepted a position as a medical director? Congratulations. Now make sure you have the right medical director liability insurance policy.

Key Takeaways

• A medical director isn’t just accountable for their own decisions and patients — they can also be held responsible for everything that occurs at the facility they oversee.
• Medical directors at medical spas face particular scrutiny, since many med spas struggle to meet state licensing and supervision requirements.
• Many standard medical malpractice policies specifically exclude claims tied to medical directorship duties, leaving a real coverage gap for directors who assume they’re already protected.
• Before accepting a medical directorship, it’s worth confirming what insurance coverage, if any, the facility provides — and whether that coverage is actually sufficient.
• If a facility doesn’t supply adequate medical director liability coverage, the director typically needs to secure their own policy rather than rely on a standard malpractice policy.
• Reading your policy’s exclusions carefully — and asking your broker about anything unclear — is far less costly than discovering a gap after a claim is filed.

Extra Responsibility Brings Extra Risk

As a medical director, you’re responsible for overseeing the facility’s operations and patient care. This means that you’re not merely accountable for your decisions and your patients – you may also be held accountable for everything that occurs in the facility. Medical directors take on extra responsibility, and that responsibility brings on extra risk.

According to American Med Spa Association, physicians who agree to act as medical directors for medical spas should be especially cautious. Despite the association with luxurious spas, medical spas are medical facilities, and the treatments conducted can carry more risks than many patients realize. Lawsuits have become common. Medical spas must also comply with state regulations. However, according to Dermatology Times, many don’t, and many medical spa owners aren’t even aware that their facilities are illegal.

If you’re considering accepting a position as the medical director of a medical spa, you should be aware of these issues. However, medical directors at all types of medical facilities must exercise caution. If something goes wrong, you could be on the hook as the medical director. And if you don’t have the right insurance, the situation could go from bad to worse fast.

A Medical Director Liability Policy Provides Needed Protection

You might assume that your current medical malpractice liability policy provides all the coverage you’ll need. However, this may not be true—and this isn’t something you want to find out when you’re named in a lawsuit.

Many medical malpractice policies specifically exclude coverage for claims related to medical directorship. As the medical director, you could be named in a claim, and your insurance policy may not provide any coverage. In our experience, this exclusion catches directors most often at medical spas specifically, where the director’s day-to-day clinical malpractice coverage and their broader facility-oversight responsibilities are easy to conflate — see our related post on who can perform medi-spa procedures in California for how these responsibilities are defined.

Protect your finances, reputation, and career:

• Take your role as a medical director seriously. If anything goes wrong, you could be held responsible.
• Before accepting a medical directorship, and throughout your position, make sure that the facility is held to a reasonable standard – for example, all licensing requirements are being met, the staff is well-trained, and the level of care is acceptable.
• Don’t accept a medical directorship without the appropriate insurance coverage. If you are offered a position, find out what insurance coverage, if any, is being provided and whether the policy will be sufficient to cover your liabilities as a medical director.
• If the facility does not supply medical director liability insurance, you will have to provide your own coverage if you want to accept the position without leaving yourself exposed. Do not expect your regular medical malpractice policy to cover this.
• Read your policies carefully and be aware of any exclusions. If you need help understanding your coverage, talk to your insurance broker.

How Much Does Medical Director Liability Insurance Cost?

Premiums for medical director liability coverage vary based on the type of facility, the director’s specialty, the scope of oversight responsibilities, and claims history. Directors at higher-risk facilities — such as medical spas offering injectables or laser procedures — typically see higher premiums than those overseeing lower-risk settings. Because pricing depends heavily on these facility-specific factors, a broker quote tailored to the specific directorship is the only way to get an accurate number.

Don’t Accept a Directorship Without Checking Your Coverage

Have questions? Need guidance? Heffernan Insurance Brokers’ Medical Malpractice Insurance team can help you review what’s covered — and what isn’t — before you sign on as a medical director.