Coronavirus Liability: Nine insurance issues

July 14, 2020

Layers of specialty liability insurance are a vital part of your risk management and asset protection plans.

As the coronavirus continues its rampage across America, the risks medical practices and their owners face have evolved. Here are nine liability insurance issues to examine as a vital part of your asset protection plan.

We’ve covered a variety of COVID-19 related risks since early this year starting with a macro-level look at economic burdens a pandemic can create. We then examined recession survival strategies, the increased level of professional risk the virus brings in crisis conditions and the value of waivers against corona virus infection liability claims. As we’ve discussed consistently here for years, layers of specialty liability insurance are a vital part of your risk management plan and, when done right, one of the most predictable and cost-effective forms of asset protection available. Unfortunately, many physicians still don’t review and understand the details of their coverage until there’s a crisis.

Here are nine specific areas of coverage to review with an experienced commercial insurance agent now, while it can still make a difference. Remember, insurance is often a system of overlapping layers of all the right kinds of insurance to the right amount. Your plan may require multiple separate specialty liability insurance policies, not just a single policy with high limits.

  • General Liability insurance. This is primarily premises liability insurance to protect you from harm to others on your property, potentially including infection claims and other injuries
  • Medical Malpractice insurance. Not all policies are created equal, make sure you understand the details of your policy including limits, exclusions, shared limits with other coverage. For the many physicians who are leaving the practice of medicine for any reason, including retirement, tail coverage for future claims that be made years after you stop practicing is vital.
  • Directors and Officer’s insurance. Also known as D&O insurance, this provides protection against a wide range of managerial malpractice claims against practice owners and executives not otherwise covered.
  • Data Breach and Cyber Liability coverage. This should be in place to provide broad scope coverage against issues ranging from ransomware attacks and data breaches to HIPPA violations related to COVID19 diagnosis, including issues related to employee screening.
  • Business Interruption Insurance. A wider range of threats have disrupted medical practice revenues over the last few months than most doctors have experienced in their entire careers including lockdowns, labor shortages, supply shortages, and ongoing social unrest that’s easily expected to last through the November election.
  • Employment practices liability insurance. Also known as EPLI, this coverage provides coverage against a wide variety of employment law related claims. Practices currently face increased risk in this area due a variety of issues including COVID testing, layoffs, furloughs, employee screening and HIPPA rights, among others.
  • RAC audit insurance. In some cases, crisis standards of care and related complications may affect what was billed, how it was billed, and to whom in a way that is non-compliant.
  • Active shooter insurance. Anti-mask hysteria has produced multiple examples of extreme overreaction by consumers that ranges from threats harassment and vandalism to actual violence. Consider your physical security exposure as healthcare continues to be politicized and the focus of wild conspiracy theories.
  • Workers Comp. Coverage. In addition to all the usual risks, healthcare workers face a variety of additional risks ranging from dealing with non-compliant patients asked to wear masks to possible infection risks.

I ran this list by commercial insurance expert David Moore, of Shepherd insurance in Scottsdale, AZ, and asked for any comments or additions. Moore said that there is often a dangerous disconnect between the officer manager or another employee that has drilled down on the details of required insurance coverage with an experienced insurance agent and the practice owner, who wasn’t part of the meetings and who is primarily looking at the costs without the full benefit of understating all the benefits. This leads to important coverage being omitted altogether in some cases or inferior policies being purchased on price alone without regard to very significant differences in what may actually be covered between two policies.

In particular, Moore mentioned that he continues to see a pattern of under-insured exposures in the areas of D&O and EPLI insurance and price resistance among practices that may be facing significant financial challenges.

While those pressures are certainly real, any one additional uninsured exposure from the list above could be the final straw for a struggling practice as litigation defense costs alone can easily be six figures.

About the Author

Ike Devji, JD, has practiced law exclusively in the areas of asset protection, risk management and wealth preservation for the last 16 years. He helps protect a national client base with more than $5 billion in personal assets, including several thousand physicians. He is a contributing author to multiple books for physicians and a frequent medical conference speaker and CME presenter. Learn more at www.ProAssetProtection.com.