CHAPTER REVIEW QUESTIONS WEEK 4

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CHAPTER 22

Professional Liability Insurance

Learning Objectives

Describe the purpose of a malpractice insurance policy, including risk categories, and the importance to professionals of carrying 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 that their policies adequately cover telemedicine services.

Obtain written verification of such coverage from the insurer.

Insurance Policy Provisions

Policy period

Defense and settlement

Coverage: Amount payable

Punitive damages

Conditions of Insurance Policies (1 of 2)

Notice of occurrence

Notice of claim

Assistance of the insured

Other insurance

Conditions of Insurance Policies (2 of 2)

Assignment

Subrogation

Changes

Cancellation

Liability of the Professional (1 of 3)

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 (2 of 3)

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 (3 of 3)

Advanced practice nurse practitioner

Registered nurse

Private duty nurse

Students

Intentional Torts: Coverage Denied

No duty to cover intentional torts

Therapist’s sexual affair with patient

Sexual assault

Medical Liability Insurance (1 of 3)

Covers

Individuals

Healthcare institutions

Outpatient facilities and clinics

Medical Liability Insurance (2 of 3)

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 (3 of 3)

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 (1 of 2)

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 (2 of 2)

Coverage for board members should include

Counsel fees and expenses

Judgments

Fines and 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

Case: Sexual Assault (1 of 2)

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?

Case: Sexual Assault (2 of 2)

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 (1 of 2)

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 (2 of 2)

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.

CHAPTER REVIEW QUESTIONS WEEK 4

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