What's the first thing I should do to reduce my practice's liability

A: "Never practice without liability insurance," says Dr. Karl Salzsieder, JD, a Veterinary Economics Editorial Advisory Board member and a consultant in Kelso, Wash. "I know of one veterinarian who inadvertently let his insurance expire. Within two weeks, he had a suit that cost him $7,000 to settle."

Dr. Salzsieder, who is president of the American Veterinary Medical Law Association, recommends having a liability limit of at least $500,000 or, better yet, $1 million. "The biggest losses are from personal human injury," Dr. Salzsieder says. "I have a friend that literally got the neighbor's house when the neighbor's dog bit the surgical nurse's hand. The liability was $600,000, while the insurance was only for $300,000—which is pretty common."

With the risks for human injury liability greater than ever before, says Dr. Salzsieder, you should establish your practice as a separate entity, a PLLC or a corporation. And your real estate, if not leased, should be an LLC.

Another way to limit liability: Give estimates for every service over $50, says Dr. Salzsieder. Explain the services you recommend, and use handouts, videotapes, and other materials to reinforce your explanation. Then clearly document in the record what materials you've provided and shown to the client.

"More than 90 percent of cases that lead to license board violations arise from improper or incomplete client communication," Dr. Salzsieder says. "One of your best defenses is to ask the client whether you've answered all of his or her questions."

Keep in mind, you need to pay attention to clients' body language, as well as to what they say. Sometimes clients are embarrassed to admit they're confused or unsure what questions to ask. "If you think this is the case, consider asking whether the client would like you to talk to any other family members before you perform the procedure," Dr. Salzsieder says.

Dr. Karl Salzsieder, JD