Discussion 10.2: Tort Reform
crtshhill58
9781284069754_SLID_CH21.pptxChapter 21
Professional Liability Insurance
Learning Objectives
Describe the purpose of an insurance policy, including risk categories, and the importance of professionals to carry professional liability insurance.
Explain the elements and conditions of an insurance policy.
Describe the investigation and settlement of claims.
Insurance
A contract that creates legal obligations on the part of both the insured and insurer.
The insurer agrees to assume certain risks of the insured for consideration or payment of a premium.
Under terms of an insurance policy, the insurer promises to pay a specific amount of money if a specified event takes place.
Insurance Policies Necessary Elements
Identification of Risks Covered
Specific Amount Payable
Specified Occurrence
Insurance Policies Risk Categories
Property Loss or Damage
Personal Injury or Loss of Life
Legal Liability Risk
Telemedicine
Can Involve Misdiagnosis
Healthcare providers should confirm their policies adequately telemedicine services.
Obtain written verification of such coverage from the insurer.
Insurance Policy Provisions
Policy Period
Defense & Settlement
Settlements & Awards
Coverage: Amount Payable
Punitive Damages
Conditions of Insurance Policies
1. Notice of Occurrence
2. Notice of Claim
3. Assistance of the Insured
4. Other Insurance
5. Umbrella Insurance
Conditions of Insurance Policies
5. Assignment
6. Subrogation
7. Changes
8. Cancellation
Liability of the Professional
News: $44M Paid in Nurse Practitioner Liability Claims Over Past 5 Years: Report
All Professionals Need Insurance.
Purpose of liability insurance is to spread risk of economic loss among members of a group who share common risks.
As risks increase, premiums increase to cover associated risks.
Premiums are placed in a shared risk fund from which funds are drawn to cover costs of lawsuits.
Liability of the Professional cont’d
Insurance coverage is especially important for
Volunteer at a clinic or health fair not sponsored by his or her employer.
Independent Contractor providing a service in a patient’s home for an independent agency or registry.
Organization covered by an insurance policy that has an exclusionary provision by which the insurance company disclaims liability for a professional’s malpractice actions brought against the insured organization.
Liability of the Professional, cont’d
Advanced Practice Nurse Practitioner
Registered Nurse
Private Duty Nurse
Students
Intentional Tort: Coverage Denied
No duty to cover intentional torts
Therapist’s sexual affair with patient
Sexual assault
Medical Liability Insurance
Covers
Individuals
Healthcare institutions
Outpatient facilities and clinics
Medical Liability Insurance (cont’d)
Insuring clause provides payment on behalf of insured if an injury arises from:
Malpractice, error, or mistake
Acts or omissions on the part of the insured during policy period
Medical Liability Insurance (cont’d)
Varies according to policy
Common risks covered
Negligence
Assault and battery as a result of failing to obtain consent
Libel and slander
Invasion of privacy for betrayal of professional confidence
Self-Insurance
Healthcare facility self-insures its malpractice risks.
Organizations should consult legal counsel before self-insuring.
Trustee Coverage
Coverage provided by organization.
Helpful in attracting qualified board board members.
For coverage to be effective.
Trustee must have acted in good faith within the scope of his or her responsibilities.
Trustee Coverage (cont’d)
Coverage for board members should include
Counsel Fees & Expenses
Judgments
Fines & Penalties
Coverage that extends to actions taken while in office or thereafter
Mandated Medical Staff Coverage Malpractice Insurance
Right to require physicians carry malpractice coverage
Right to suspend physician for not having coverage
Case: Right to Suspend Physician
Investigation and Settlement of Claims
An insurance company may decide to settle a claim based on the risk, usually because of:
Costs associated with a trial.
Higher payout could occur should the case go to trial.
Review Case Sexual Assault
Does sexual assault generally constitute rendering professional services within the coverage provisions of a physician’s insurance policy?
Should a malpractice insurer be required to indemnify a physician for liability resulting from the sexual assault of a minor?
Review Case Sexual Assault (cont’d)
No!
Sexual assault does not constitute rendering professional services within coverage provisions of an insurance policy.
New Mexico Physicians Mut. Liab. Co. v. LaMure held the malpractice insurer not required to indemnify a physician for liability resulting from the sexual assault of a minor.
Review Questions
What is the purpose of an insurance policy?
Describe the conditions of an insurance policy.
What are the primary components of an insurance policy?
What are the primary categories of a risk?
What are the distinct parts of an insurance policy?
Review Questions (cont’d)
Under what circumstances should a healthcare professional self-insure?
Should a board member have personal liability insurance coverage?
Describe what acts a professional liability policy covers, as well as the risks it does not cover.
