Professional Liability Insurance Overview of Exposure and Insurance Physicians Professional Liability Insurance Accountants Professional Liability Insurance

Overview of Professional Liability Exposures and Insurance Duties of Professionals Contractual duty Damages CompensatoryConsequential LiquidatedNominal Tort-related duty Contract versus tort actions Professional corporations

Overview of Professional Liability Exposures and Insurance Professional Liability Coverage under CGL Professional health care services exclusion Coverage restricted to: Bodily injury Property damage Personal injury Advertising injury Professional liability exclusion sometimes added

Professional Liability Insurance Common Characteristics Most coverage written by specialized insurers Covered acts and consequences Differs from business exposure Coverage depends on profession Medical - injury Accountants, attorneys - financial harm Errors and omissions coverage - negligence

Common Characteristics (cont) Who is covered Professionals, partners, owners, officers Defense coverage Sometimes included in policy limits Sometimes settlement requires insured’s consent Coverage triggers Claims-made common Extended reporting period is not guaranteed and not unlimited Coverage territory

Physicians Professional Liability Insurance Loss exposure Legal standards - negligence Standard of care Locality rule Specialists and duty of referral Delegation Diligence and abandonment Informed consent

Physicians Professional Liability Insurance Common allegations Surgical error Improper diagnosis Improper tests Lack of informed consent Use and administration of anesthetics or drugs

Physicians Professional Liability Insurance Defenses Statute of limitations Good Samaritan statutes Contributory negligence Informed consent

Physicians Professional Liability Insurance Policy provisions Insuring agreements Individual coverage Organization coverage Exclusions (varies by policy) High risk medical procedures Criminal acts Sexual misconduct Proprietary activities Punitive damagesDiscrimination PollutionContractual

Physicians Professional Liability Insurance Loss Control Know the patient Maintain communication and exercise courtesy Keep thorough records Avoid even the appearance of negligence Diagnose and test thoroughly Keep informed about informed consent Know what’s happening in the hospital Don’t take on too much work Monitor partners and staff Prevention is the best defense

Physicians Professional Liability Insurance Loss Control - Measures to reduce or eliminate hazards Do not diagnose by phone Do not press for collection of fees if any basis for suit Verify patient identity and operation before surgery Do not admit fault Maintain professional manner and tactful approach Delegate carefully Check medical equipment Maintain accurate records Avoid overly optimistic prognosis Maintain confidentiality Arrange for a qualified substitute

Accountants Professional Liability Insurance Loss exposure Breach of contract Improper or incomplete performance Tort liability Failure to perform with reasonable professional care and competence Statutory liability Securities laws ERISA

Accountants Professional Liability Insurance Common allegations against accountants Tax services Audit services Accounting services Client counterclaims (when suing to collect fees) Failure to detect embezzlement Securities laws Business and investment advice Breach of fiduciary duties Management advisory services

Accountants Professional Liability Insurance Policy provisions Insuring agreement Professional services Defense costs usually within policy limits Who is insured Named insured, officers, directors, partners, stockholders and employees for professional services Heirs, executors, administrators and legal representatives

Accountants Professional Liability Insurance Exclusions that may apply Bodily injury or property damage Dishonest or criminal acts Defense against these charges covered Innocent insureds liable for dishonest acts of another covered Punitive damages Contractual liability