Protecting Practice Partners: D&O Insurance for Physician Groups
Physician groups and medical practices need directors and officers (D&O) insurance to protect the managing partners and officers who run the business side of the practice. When a group is sued over a partnership dispute, a wrongful termination, an employment claim, or a contract disagreement, those claims often name the physician-leaders personally. D&O insurance protects their personal assets in a way that medical malpractice coverage simply does not.
As independent practices consolidate and physician groups grow into multi-site organizations with real management structures, the management-liability exposure grows with them. The larger and more sophisticated the group, the more its leaders look like corporate officers in the eyes of a plaintiff.
Key Takeaways for Physician Group Leadership
- Employment claims lead: Wrongful termination, discrimination, and harassment claims are the most common D&O triggers for medical groups.
- Partnership disputes: Disagreements among partners over compensation, buy-ins, and governance frequently become lawsuits.
- Not covered by malpractice: Management and employment claims fall entirely outside a malpractice policy.
- EPLI often bundles in: Many group policies pair D&O with employment practices liability to cover the most frequent claims.
- Growth raises exposure: As groups acquire practices or add partners, governance complexity and claim frequency rise together.
What D&O Claims Do Medical Practices Actually Face?
Unlike publicly traded healthcare companies, physician groups rarely face securities litigation. Their claims come from people they work with day to day, and that changes how the policy should be built. For context on what employees pay out of pocket, see our guides on dental filling costs without insurance and braces and Invisalign costs without insurance.
- Employees alleging wrongful termination, discrimination, or harassment, which name both the practice and its officers.
- Partners in dispute over compensation formulas, equity buy-ins, or governance decisions.
- Departing physicians contesting non-compete or restrictive covenant enforcement.
- Vendors and payers alleging breach of contract or improper business practices.
- Regulatory inquiries into billing or coding that name practice leadership.
Physician Group Coverage Review
Medical groups face management and employment claims that malpractice coverage leaves wide open. Our licensed advisors structure D&O and EPLI programs for physician groups and multi-site practices.
Request Enterprise ConsultationD&O vs. Malpractice vs. EPLI for Medical Groups
Physician groups carry several liability policies that are easy to confuse. Each one answers a different kind of claim, and a gap in any of them can leave the practice or its partners exposed.
| Policy | Responds To | Example Claim |
|---|---|---|
| D&O | Management decisions | Partner sues over a governance or compensation decision |
| Medical malpractice | Patient care | Patient alleges a treatment error |
| EPLI | Employment practices | Former employee alleges wrongful termination |
Find the Gaps in Your Coverage
Many growing practices discover their malpractice policy does nothing for a partnership or employment lawsuit. We map your coverage against the claims your peers are seeing.
Schedule a Coverage ReviewPhysician group D&O sits within the broader healthcare D&O insurance framework. Physicians transitioning between employment and practice ownership also face individual exposures we cover for healthcare workers. Groups affiliated with a larger system should also review D&O insurance for hospitals and health systems.
What Does Physician Group & Medical Practice D&O Cost?
D&O pricing for healthcare organizations is driven far more by exposure profile than by size alone. The market is currently soft and competitive — D&O posted the largest decrease of any commercial line in late 2025 (about −3.8%, eighth straight quarterly decline) — which means well-governed healthcare organizations can lock in broad terms at favorable pricing right now, even as claim severity keeps rising. The factors that move your number:
- Group size & number of owners — more partners means more management-decision exposure.
- Employment practices — physician and staff disputes are the most common claim type for groups.
- Billing & coding exposure — Medicare/Medicaid audit and False Claims Act risk.
- Practice activity — mergers, private-equity transactions, and de novo expansion raise exposure.
- Whether D&O, EPLI, and malpractice are coordinated — gaps between them are where uninsured claims land.
Relative Cost Positioning by Profile
| Profile | Relative cost band | Primary cost driver |
|---|---|---|
| Solo / 2–3 physician practice | Lower band | Limited management exposure |
| Mid-size group (10–30 physicians) | Mid band | Employment + billing exposure |
| Large group / IPA | Upper band | Governance complexity, PE activity |
| Group in PE transaction | Highest variance | Transaction + representation exposure |
Directional, peer-relative positioning — not a quote. Actual premium depends on claims history, asset size, governance, and venue.
Illustrative Scenario: The Partner Dispute D&O Caught
A 22-physician specialty group went through a contentious partner exit. The departing physician alleged the management committee had breached its fiduciary duty in how it valued and paid out the buy-out — a classic management-decision claim that malpractice insurance does not touch and that many groups wrongly assume their EPLI covers. Because the group carried a properly structured D&O policy, the defense and settlement were covered. Groups that treat D&O as optional because ‘we have malpractice and EPLI’ routinely discover this gap only when a partner dispute or buy-out turns adversarial.
Frequently Asked Questions
Does my malpractice insurance cover a partnership lawsuit?+
No. Medical malpractice insurance responds only to patient-care claims. A dispute among partners over compensation, governance, or a buy-in falls entirely outside that policy and is exactly what D&O is built to address.
This gap surprises many practice owners, who assume their malpractice carrier handles all litigation against the group.
Should a small medical practice carry D&O insurance?+
Any practice with partners, employees, or a formal management structure has exposure. Even a modest group can face an employment claim or a partner dispute that puts personal assets at risk.
The right coverage level scales with the group’s size and complexity, which is something our advisors size to each practice.
Can D&O and EPLI be combined for a physician group?+
Often yes. Because employment claims are the most frequent trigger for medical groups, many carriers bundle D&O with employment practices liability in a single management liability policy, which can be more cost-effective than buying each separately.
The right structure depends on the group’s claim history and risk profile, which our advisors evaluate during a coverage review.
What happens to D&O coverage when a practice is acquired?+
Acquisitions typically require runoff or tail coverage to protect the prior leadership for claims arising from decisions made before the sale. Without it, departing partners can be left personally exposed.
This is a common oversight in practice transactions, and it is far cheaper to arrange before the deal closes.
Are managing partners personally liable in a medical group lawsuit?+
They can be. Managing partners and officers who make business decisions for the group can be named individually, and if the practice cannot indemnify them, their personal assets are exposed. Side A coverage exists for exactly this situation.
This is why physician-leaders, not just the practice entity, benefit directly from a well-structured D&O program.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or insurance advice. Healthcare insurance programs require individualized analysis based on specific operations, risk exposures, and regulatory requirements. Consult with our licensed insurance advisors for guidance tailored to your organization’s needs.
Work With Licensed Healthcare Insurance Advisors
Hotaling Insurance Services structures D&O and management liability programs for physician groups and medical practices navigating partnership, employment, and growth risk.
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