As its name might suggest, a health care professional bond is a specialized bond required to any health care professional that wishes to initiate a business related to the health care industry. It is a type of surety bond that is required before licensing any health care service provider. The main objective of a health care professional bond is to assure that the health care professional will deliver its services in full adherence to the law and regulations that are required by the industry. It is a way to protect any client or customer from a financial loss due to unlawful behavior. The exact conditions and expectations included in this type of bond are dependent on the state laws that regulate the industry and the specific legal language in which the health care bond is underwritten.
As with any other surety bond, a health care professional bond is a legally enforceable contract where three parties come together. The first party is known as the Principal. The principal is the health care professional that requires the bond in order to operate a health care service provider business. When purchasing a bond of this type, the principal agrees that it will act in full accordance to the laws and regulations required by the industry. It is a financial guarantee that the principal will act in honest, clean manners.
The second party is known as the Obligee. This is the party that requires the bond before issuing any license or permit. State government entities are usually the ones to play this part of the contract. The obligee will also determine most of the conditions and expectations that should be included in the bond. A bond is required by the obligee in order to achieve better regulation of the industry and the services it provides. The bond also protects the obligee from any financial loss that could come out of unlawful or ethically dubious behavior from the health care professional.
The third and final party is known as the Surety. This is the party that will sell, underwrite and issue the bond. Since the surety must have a strong financial support, insurance companies are the usual player for this party. As the issuer of the bond, the surety has specific obligations towards the principal and the obligee. If the health care professional ever incurs in unlawful treatment or ethically dubious services that contradict the conditions stated in the bond, the obligee has the legal right to make a claim against the bond. It is the obligation of the surety to start and conduct an investigation to determine if the claim is valid. In the event of a valid claim, the surety will pay a fee to the obligee for any harm or damage that might have come from the unlawful acting of the principal. The surety will then charge the principal for the reimbursement of the paid fee plus any other legal fees incurred during the investigation of the claim.
A healthcare provider that wishes to purchase a bond must first comply with every prerequisite needed by the surety in order to start the purchase process. An initial credit check is necessary in order to assure that the healthcare professional is financially stable enough to fulfill the financial obligations the healthcare bond includes.
Most state governmental agencies use healthcare bonds to have a strong regulation over the healthcare industry. It is a contract made by three parties to protect the obligee and the customer from any possible fraudulent action. The existence of healthcare professional bonds promotes a good relationship between service provider and client and helps the industry to achieve better credibility and provide stronger good-quality service.