When Your Malpractice Policy Won't Cover You; and More

Surprising Situations Where Your Malpractice Insurance May Not Cover You

Most doctors take comfort in the fact that, if worse comes to worst, their professional liability insurance will cover them if they're named in a conventional medical malpractice suit.

But is this same peace of mind warranted if the suit is out of the ordinary -- if it's unconventional? Will their liability insurance cover them in such cases? Not always, says Indiana attorney Michael J. Sacopulos, CEO of the Medical Risk Institute in Terre Haute. Sacopulos explains what he means in a feature in the September issue of Connexion magazine, a publication of the Medical Group Management Association and the American College of Medical Practice Executives, which merged last year. According to a summary and explanation of the feature on amednews.com, there are unexpected reasons a physician might get sued.^[1]

One is as the result of administrative negligence. In a case from several years ago, for example, a couple sued Hiawatha Community Hospital, in Kansas, and several staff members for medical negligence. The plaintiffs claimed, "that their newborn son sustained a preventable brain injury as a consequence of untreated jaundice." Up to this point, at least, the case hewed to a fairly conventional line. But as part of their claim, the plaintiffs also sued "a physician medical director who was responsible for developing and initiating policies and protocols for newborn care at the hospital." Hospital attorneys asked that the court dismiss the medical director from the suit on the grounds that she neither provided care to the child nor had a physician-patient relationship.

But in a ruling on May 4, 2011, the US District Court for the District of Kansas rejected the motion and permitted the administrative negligence claim to proceed. According to the court, "the medical director had a duty to develop and maintain procedures for the hospital." The case was eventually settled for $4.3 million.

The everyday practice of writing a letter of recommendation can also lead to a medical liability suit. A case involving a Louisiana anesthesiologist who wrote a positive letter about a former colleague illustrates the point.

Following the letter, the former colleague was hired at another medical center, this one in Richland, Washington, where a year later he became involved in a medical negligence suit. The suit claimed that he had failed to properly administer anesthesia to a patient because he, the doctor, was under the influence of drugs. The Richland-based medical center settled with the plaintiffs for $7.5 million, but it then sued the Louisiana anesthesiologist who had written the original letter of recommendation. This suit claimed that, in his letter, the anesthesiologist had failed to disclose that his former colleague had been terminated for suspected drug abuse. "A jury ordered the anesthesiologist to pay the [Richland-based] medical center's settlement and legal costs, which totaled $8.2 million. The physician's medical liability insurer refused to cover the claim because the physician had not committed 'a bodily injury.'"

Experts also advise doctors to consider carefully before providing online recommendations for employees.

The best safeguard, experts advise, is for doctors to check with their malpractice carriers to find out which unexpected occurrences are or aren't covered.