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Transcript – Episode 2: Avoiding Insurance Coverage Gaps

Social Work Risky Business Podcast

Transcript

Hello everyone. Thank you for joining our podcast today. This is Phil Lawson, vice president of product development and risk. Today, we’ll talk about avoiding insurance coverage gaps. Before we do, I must say that you healthcare professionals are to be congratulated for the noble work that you do and be recognized for the positive difference that you bring to people’s lives every day. You are all healing change agents helping people throughout all walks of life, making life better for them. There is no greater cause than your passionate and skilled contributions to people. That’s why we have your back here at the Risk Retention Group that the policyholders own that’s insuring them. We are dedicated to your wellbeing and to your protection.

Our nation truly values your services too, and into the future as shown by the following statistics. You may be interested to know that the US Department of Labor, Bureau of Labor Statistics in 2016 forecasted over the next decade that the healthcare field is booming.

A look at the fastest growing 30 occupations of all the occupations in the United States indicates that eight are in the allied health sector. This sector contains a variety of healthcare and behavioral health care workers in a lot of related occupations and therapies. These eight occupations account for 4.9 million workers today and over 13 million workers in the next 10 years, which is a 32% growth rate over the decade. That’s over four times the average growth rate compared to all other occupations in the United States. You are truly working in a growing and very important, highly valued field.

Let’s talk about avoiding insurance coverage gaps. These are some tips for healthcare workers to manage risk. Now, it all starts with the basics. First, do not assume that your employer will cover you, even if you are a student working for an agency. Next, look at the insurance policies that you need for your own protection, including cyber liability, general liability, and most definitely a malpractice professional liability policy. Many do not cover you as comprehensively as the Risk Retention Group policies.

Here’s a case in point that recently occurred, real-life story.

There was a healthcare worker-student on assignment at an agency by the name of Gayle Goodbody, not her real name, and she worked for a short period of time for the agency while on a break from her studies at college. Gayle completed her work assignment and continued back to college. Gayle assumed that the agency’s insurance covered her. While working on this very short stint during the college break at the agency, Gayle was involved in a case with her agency associates regarding a domestic dispute between a married couple.

The husband was ordered to attend counseling sessions, and as a result, his firearms permit was taken away. The husband filed a lawsuit naming Gayle as one of the many defendants, even though Gayle was back at college. Gayle had no insurance coverage and the agency’s insurance carrier did not defend Gayle. Gayle is now faced with paying for her legal defense expenses, which will probably start at $1,500 and could be as high as $5,000. If Gayle had bought her own individual professional liability policy, she would have been defended for up to $1 million, with first dollar coverage and no deductible.

Here is another example.

Betty Getwell, that’s not her real name, of course, sent a fax with her patient’s name on the letter referencing a recent case meeting. Betty accidentally reversed the last two numbers of the fax telephone number and the fax was misdirected to another unknown fax machine. That act immediately triggered a violation of information breach and the state licensing board noticed an inquiry.

Betty reported the incident to her insurance carriers, which was proper to do, and it was immediately processed as a valid claim with all of Betty’s expenses paid. The professional liability policy covers these types of claims that are offered by the Risk Retention Group, and Betty did not have to pay any costs, which amounted to over $1,500 in legal fees. There are many professional liability insurance policies on the market today that specifically exclude defense for these types of claims, so check your policy very carefully.

We have another example for you. Experience shows that defendants are most frequently innocent, but legal defense costs are required to defend. Many insurance carriers preclude legal defense in certain categories, and oftentimes, your employer’s policy probably does not cover you at all. We have an example here of a hospital healthcare contractor who was not covered by the hospital’s policy. We recently defended the insured who was not provided with legal defense from her county hospital because she was working for the county in this case as an independent contractor.

The county hospital was named as a defendant, as was the RRG insured healthcare worker. The hospital inappropriately discharged the patient too early, which was no fault of the healthcare worker, our insured. This case has been active for over 17 months and has already cost $26,000 in legal defense fees that will be no indemnity cost to the Risk Retention Group because there was no negligence on the part of the healthcare worker. However, there are legal fees to the tune of at least $26,000. The policy premium was under $200. Nevertheless, the insured is completely protected. Malpractice cases are built on negligence and blaming you for the damages arising from your negligence. There is no cost to defend the matter, no matter what.

You can also be held liable for legal fees, fines, penalties, and licensing board inquiries and legal defense, damages to the victim and paying for identity theft protection subscription for the victim if there’s lost records or a breach of information, a security review and an audit of your practice conducted by a professional and notifying each patient by mail or breach. The costs are staggering and could bankrupt your practice. That’s why it’s very important to have a cyber liability policy that protects you against violations of the HIPAA HITECH 45 CFR Part 160 law.

This law makes you directly responsible for a breach of patient information, regardless of whether the breach occurred by you or a third party working for you, such as a mover of paper files or warehouse storage facility or an internet service provider. Civil penalties can range from $100 to $25,000 per occurrence and up to $1.5 million for willful neglect. Criminal penalties range from one to 10 years in prison with fines of $50,000 to a quarter of a million dollars. Cyber liability is a key negligence claim that in many cases, professional liability coverers are not geared to handle. The Risk Retention Group offers a comprehensive cyber liability policy that covers all the major perils arising from that at a very, very low premium.

Again, we can’t say enough about medical records requests and breach of confidentiality. These claims, risks are the most frequent that we find in healthcare professions. These claims trigger lawsuits and licensing board inquiries and HIPAA breach liability. They can hold you as first party or even you responsible for the third party’s breach. The Risk Retention Group offers a variety of cyber liability products and cyber device insurance products that protect you. The cyber liability suite consists of six different levels of protection, all at affordable prices.

Potential liability is now a fact of the healthcare profession, regardless of role, context, or venue. You can’t assume that your employer or school will cover any and all liability. That is why you must always carry your own individual professional liability policy, and we strongly suggest a cyber liability policy when you handle client records. In many cases, a general liability policy if you have an office or a suite or conduct sessions or conferences outside of your office, say at a hotel conference facility.

There are a lot of liability risks that can hurt you financially and professionally, regardless of your status as an employee, a sole practitioner, or a student. The best way to stay ahead of the damages and risk curve is to regularly attend the Risk Retention Group risk management workshops, stay up to date on the local laws, statutes, and the policies and rules in your occupation. Also available to you as an insured of the Risk Retention Group is the helpline, at no cost to you, where you can learn what to look for when shopping for a good set of liability insurance policies to protect yourself. Thank you for listening, and that concludes our podcast today.

Podcast – Episode 2: Avoiding Insurance Coverage Gaps

Related – Avoiding Malpractice Tip: Avoiding Insurance Coverage Gaps.