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The Advocate
Winter 2009/2010
Three Often-Overlooked Medical Mutual Policy Highlights - and Why They Matter
Medical professional
liability insurance is
serious business. And
like any legal contract,
when you’re talking
about the actual language
of a policy, it can get complicated in a hurry. The
fact is, whether you’re a physician, a practice manager, or a
hospital administrator, there are likely to be aspects of
your medical professional liability insurance policy that
you don’t grasp entirely. You may even be completely
unaware of certain coverage benefits and nuances.
That’s why, starting with this issue of the Advocate, Medical
Mutual will attempt to peel the onion, so to speak, and dissect
the contract legalese to provide you with plain English explanations
of specific policy features. The goal is to help you understand
exactly what you get with a Medical Mutual policy and to
make sure you have the necessary insight to take full advantage
of your Medical Mutual benefits.
We’ll begin by shining a light on three often-overlooked features
of a typical Medical Mutual policy: 1) “Coverage B,”
which typically pertains to physician versus physician or physician
versus administrator lawsuits 2) Physician Administrative
Defense, a provision related to defending physicians when, for
instance, their licensing or practice privileges are put in jeopardy
by a government body or institutional board and 3) coverage
for allegations of “undue familiarity,” more commonly
referred to as sexual misconduct.
Coverage B: What is Non-Patient or Staff Privileging Incident Liability?
Under what circumstances might a physician or administrator
be subject to a professional liability claim from a non-patient?
Typically the answer lies in one’s professional duties serving as a
member of, say, a peer review or quality committee. In such
roles, a physician is often asked to render an opinion on the
conduct or service of a physician relative to a specific incident
or set of circumstances. In such cases, your opinion could very
well impact that physician’s employment status or ability to
practice. When that impact is negative, it is becoming more
common for the physician to bring a suit against you for your
role on the review committee and for allegedly damaging his or
her reputation and livelihood.
A separate limit distinguishes Medical Mutual’s coverage.
Most insurance carriers cover such claims in some way. But
there is a significant difference between the way Medical Mutual
covers such claims compared to other carriers. Specifically,
Medical Mutual provides for a separate coverage limit from
your standard medical professional liability limit. Other carriers
treat such claims “within limits.” That is, they are part of your
standard medical incident liability limit. So consider a scenario
where you are sued by a fellow physician for an opinion you
rendered as part of a peer review committee; then in the same
policy year, a patient files a claim against you due to an adverse
medical outcome. With most companies, you have just one set
of liability limits to cover both claims. With Medical Mutual
on the other hand, the patient injury claim would be protected
under one set of liability limits, while the physician-privileging
claim would have a separate set of limits. In other words, the
physician-privileging claim would not reduce the coverage
available to you for patient-injury claims, the predominant risk
for which you purchase coverage, providing you with far
greater protection of your assets.
Physician Administrative Defense:
When it’s time to answer to The Man.
Physician Administrative Defense (PAD) is a feature of your
medical professional liability insurance policy you can take
advantage of should you be the subject of a disciplinary proceeding
in front of a government licensing board, a hospital
board, or any other organization that can curtail, suspend or
revoke your ability to practice. Like most carriers, Medical
Mutual provides coverage, subject to limits, for legal consultation
and defense costs related to administrative disciplinary proceedings.
Again, differences arise, however, in how Medical
Mutual and other carriers treat such situations.
Reimbursement and coverage are not the same.
While some will reimburse you for expenses incurred to defend
yourself in such situations, Medical Mutual pays the expenses
directly (up to the specified limits). So you incur no out-ofpocket
expenses. With Medical Mutual, you also receive this
coverage as part of the standard medical professional liability
policy. And, there are no caveats with Medical Mutual’s protection.
For example if you receive notice from your state’s Medical
Board that an investigation of your license has commenced,
coverage under your Medical Mutual PAD endorsement applies
regardless of whether the investigation is of a matter never likely
to become a professional liability claim.
Undue Familiarity Allegations: When sexual misconduct claims threaten you or your organization.
Sexual misconduct allegations against individual physicians and
organizations may not be covered under some policies; or more
typically are subject to limitations. And the details of the coverage
vary greatly from carrier to carrier.
Differences in limits and corporate coverage can be significant
Some policies exclude completely coverage and defense for such
claims, even if there are also allegations of professional negligence
in the claim, or if the sexual misconduct allegations are
baseless. Others cap their coverage; for instance, providing a
“sub-limit” of $100,000 to apply not only to the first claim of
alleged sexual misconduct, but that same $100,000 is all you
have to protect you for any other claim against you for sexual
misconduct asserted in that same policy year. Furthermore, the
cost of your defense reduces that “sub-limit” under this type of
policy. Medical Mutual does not sub-limit the amount of
defense coverage provided and defense costs are outside the
limit of liability. And while most policies, including Medical
Mutual’s, do not indemnify on behalf of “the perpetrator” if
that individual is found liable for sexual misconduct, Medical
Mutual will indemnify on behalf of the corporation or hospital
if the organization is found vicariously liable for the sexual misconduct
of the perpetrator — a significant difference relative to
corporate coverage under competitor policies.
Policy Features in Plain English: More to Come.
Look for more easy-to-understand explanations and insights on
one or more medical professional liability insurance policy features
like the ones above every quarter as “Policy Features in
Plain English” becomes a regular feature of the Advocate.