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Protecting yourself and your Practice
Articles posted on 17 / 12 / 18

If you are a partner in a medical practice or looking to become a partner, then you need a good understanding of what risk protection (if any) your partnership agreement includes, as you need to ensure your personal insurances work in conjunction with cover afforded by the business.

Specifically, you need to know how you (and your colleagues) will be treated financially by the business if unable to work for a prolonged period of time, were diagnosed with a critical illness or at worst, passed away prematurely. 

Some agreements provide a clear statement of intent, such as a period of time that the business would continue to pay a colleague for and at what rate (for example, 100% of their pre-disability income or a percentage thereof).  The next step, however, is how will the business cover such costs?  In many instances, we have found that there is no funding mechanism in place.  This places the other doctors in the practice in a vulnerable financial position which is often not addressed in the partnership agreement.

There are insurance covers available to mitigate the negative financial effects of supporting a partner in a time of need, so you can focus on providing the emotional support they will require.  For any practice partner there 2 fundamental issues that we recommend you address:-

  1. A business continuation plan – what do you need to keep your business going whilst a partner recovers?

  2. If a partner cannot recover, what is the exit strategy and how will this be funded?

With this clarity, you can ensure your personal insurances match your partnership agreement. 

If your partnership has not specifically addressed these business risks then MFAS can assist you in putting a plan in place.


Call Lynda on 0800 379 325 or email on lynda@mfas.co.nz