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 IS
YOUR E&O COVERAGE BARE?
by Charles
Crispin, President & CEO, Evergreen RE
In a tight liability insurance market,
it becomes essential for buyers to understand the wide array
of professional liability exposures faced today by Managed
Care Organizations (MCOs). Making sure your current E&O
coverage is broad enough to protect your organization from
the growing number and severity of claims against MCOs is
critically important. There is no better time to do this than
right now.
Even as insurers in this tight market are trying to quote
very restrictive programs that are often not broad enough,
you need to insist on a policy that addresses exposures such
as vicarious liability, ERISA violation, corporate negligence
-- especially utilization review and credentialing -- consequential
damage from contractual breach, anti-trust, expanded case
review, e-commerce and discrimination.
The first step in making sure you're properly covered is
understanding your risk. It is absolutely vital to balance
the need for coverage against ever more complex exposures
with an appropriate premium expense.
Checking Your
Managed Care E&O Coverage
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As recent court decisions continue to impact
liability protection, the following key points
need to be considered when buying E&O coverage.
- Broad coverage specifically addressing:
- Utilization review
- Provider selection
- Claim services
- Advertising, marketing and selling activities
- Vicarious liability
- Medical information protection
- Development and implementation of financial
incentive plans and clinical guidelines
- Broad definition of a claim related to alleged
wrongful acts that explicitly include arbitration,
mediation and declaratory or injunctive proceedings,
and not limited to a demand for monetary damages
or services
- No exclusions of ERISA, contract, RICO, discrimination
or class action
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- No limits to services rendered to third parties
for a fee
- No limits to damages in tort or compensatory
damages
- No retroactive date limitation
- Coverage for anti-trust claims that extends
to suits brought by competitors as well as providers
- Coverage for legal expenses associated with
breach of contract, including those brought
by customers, vendors, suppliers and subcontractors
- Coverage for medical malpractice allegations
involving managed care activities
- Coverage that includes an automatic extended
claim reporting period in the event the company
shuts down operations
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