Tailor-Made Policies Provide Good Options for Medical and Professional Liability Market

Is coverage “tailor-made” for emerging industries the future of professional liability insurance? Traditional professional liability, which has typically served lawyers, accountants and doctors, isn’t necessarily the right fit when it comes to some growing professions.

Whether their clients are consultants, nurse’s aides or chicken sexers, many producers have found a gap in the professional liability marketplace. Coverage has not always kept pace with occupational changes, leaving many producers and their clients seeking insurance that actually addresses the biggest industry-specific exposures.

Allied healthcare practitioners, architects and engineers, and miscellaneous professional liability are some areas where tailor-made coverage has been introduced. Business owners and employees in these areas can face unpredictable situations, difficult patients or clients, and changing protocols for licensing and certification; they need coverage that addresses those exposures.

The legal liability landscape also has shifted. These professionals historically have not faced the same level of claims activity as more traditional lines. But as these professions become more common and prominent, business owners are increasingly exposed to the possibility of legal action. Professionals are being held to a higher standard, and if customers, clients and patients feel that services have fallen short of expectations, there are few barriers to bringing legal action. Even if a case has no merit, defense costs can escalate quickly.

Client or vendor contract requirements also is driving the need for more industry-specific coverage. Comprehensive insurance is often a prerequisite for winning substantial government or private-sector contracts that businesses in many of these less-standard professions need to stay in the black. Tailor-made coverage helps ensure that when they buy coverage to fulfill a contract, they also are getting great protection.

While tailor-made coverage is appropriate for many, some professional liability policies are limited by exclusions and require endorsements. Some carriers choose to steer clear of providing broad, easy-to-understand coverage for these professionals. For producers, this opens up an opportunity to help clients find more suitable insurance that fits their needs, and not only for professional liability. Some carriers will package general liability, crime and privacy coverage with customized professional liability policies, solving many coverage problems at one time.

Tailor-made policies are designed to make selling and buying insurance easier, more streamlined and understandable to clients and prospects. They are explicit about risks and what they cover. The transparency is a major selling point.

Some of the desirable, in-demand coverages that are being built into base specialty forms include defense of licensing proceedings and subpoena assistance coverage. Producers and clients will even find policy forms that include leased, temporary and voluntary workers as insureds along with independent contractors, extensions that are not included in many standard forms.

For allied healthcare specifically, HIPAA violations and sexual misconduct sublimits often are included in the base form as a coverage enhancement. Previously, HIPAA violations have only been available as an endorsement, and sexual misconduct was excluded from many policies. In another example, affirmative loading and unloading coverage for ambulance and medical transportation is included in the base form.

The list of professions covered just by the three categories of allied healthcare, architects and engineers, and miscellaneous professional liability is in the triple digits. For clients working in a profession with industry-specific exposures, tailor-made coverage could be the best choice. They are an attempt by insurers to stay current with the changing professional workplace and its evolving insurance needs.

Topics Medical Professional Liability