Colorado Ambulatory Surgery Center Association JUNE 6, 2016

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1 Colorado Ambulatory Surgery Center Association JUNE 6, 2016

2 INTRODUCTION We have served leading healthcare entities in our community since 1993 Our team is highly involved and experienced in the healthcare industry Our knowledge of the healthcare industry enables us to better assess related exposures and determine coverages to address them

3 MEDICAL PROFESSIONAL LIABILITY Colorado Specific Insurance Laws & DOI Requirements State legislature in Colorado mandates surgery centers must carry a per location limit The Colorado Financial Responsibility Statute applies to various health care facilities in Colorado It does not prohibit a deductible but does require the insurance company to pay the deductible up front The policy and/or endorsement language must clearly state that the insurance company will pay on behalf and not require the insured to pay the deductible (or retention) before the insurance company pays Punitive damages are excluded in the state of Colorado

4 MEDICAL PROFESSIONAL LIABILITY Definition of an Occurrence/Claim (varies slightly by insurer): The furnishing of or failure to furnish professional services, an actual or alleged event, incident, act, omission, or accident or a series of actual or alleged events, incidents, acts, omissions, or accidents or repeated exposures to substantially the same general conditions, resulting in bodily injury, or property damage, neither intended or expected from the standpoint of an insured, which may give rise to a claim. All actual or alleged events, incidents, acts, omissions, or accidents arising in connection with a continuing course of treatment shall constitute a single occurrence regardless of the number of participants in such events, incidents, acts, omissions, accidents or course of treatment. All actual or alleged events, incidents, acts, omissions, or accidents in the course of obstetrical treatment of mother and fetus or fetuses, from conception through postpartum care, constitute a single occurrence. The date of the first event, incident, act, omission, or accident involved in a potential claim shall be the date of the occurrence. All injuries and/or damages arising from a continuing course of treatment, a series of events, incidents, acts, omissions, or accidents, or repeated exposure to substantially the same general conditions shall be deemed to arise from a single occurrence.

5 CLAIMS MADE VS. OCCURRENCE POLICY FORM Occurrence coverage: Extends coverage for otherwise covered occurrences, as long as the policy is in force when the actual or alleged medical malpractice occurs As long as this condition is met, coverage is not jeopardized if the policy is cancelled or not renewed when the claim or lawsuit papers are subsequently filed Claims-made and reported coverage: Extends coverage for otherwise covered occurrences only when: - The policy is in force when the actual or alleged medical malpractice occurs AND Claim-made coverage is significantly less expensive than occurrence coverage - The policy or a renewal of the policy is still in force when a subsequent claim or suit is made

6 QUESTIONS TO ASK What Professionals Need to Know Inclusion of coverage for administrative duties of medical director Premium based on revenue, patient visits and/or number & type of procedures Non-physician-owned facilities are acceptable by state law Consent to settle/hammer clause Defense costs outside limit Incident reporting Abuse sub-limit Occurrence forms are available Extended reporting period options (tail) Retroactive date / prior acts coverage Coverage s and exclusions specific to surgery center such as exclusion of procedures and physician vicarious liability Deductible/retention availability

7 CYBER LIABILITY Colorado Specific Insurance Laws & DOI Requirements Breach notification costs vary by state and some carriers only respond to statutory law Make sure to partner with a carrier that encompasses notification in all states (full voluntary on notification costs) Breach applies in the state where the patient resides not your entity

8 CYBER LIABILITY The modern definition of cyber liability can include: Privacy liability Covers loss of personally identifiable employee and customer information Security liability Covers failure to prevent the entrance or spread of a virus/hacker attack Website media liability Covers libel, slander and copyright infringement from your website content First-party cyber extortion Covers expenses to respond to a threat to harm or release your data Covers ransom payments if necessary Regulatory defense and penalty First-party privacy breach response (Common to sub-limit the coverage to an amount lower than the annual aggregate limit) Customer notification expense Credit monitoring expense Computer and legal forensic expense Credit and identity repair expense First-party business interruption and data recovery extra expense

9 CYBER LIABILITY THIRD-PARTY LIABILITY COVERAGE Security Privacy Media/Content Regulatory Actions Failure of network and information security to prevent the transmission of computer viruses or the penetration of a hacker Failure to protect private or confidential information Libel, slander, and other forms of disparagement, etc. with respect to display of material online as well as infringement of a copyright by your website content Regulatory actions brought by state or federal agencies to enforce privacy regulations FIRST-PARTY COVERAGE Business Interruption Crisis Management Extortion/Threat Expenses Privacy Interruptions in business due to breaches of a company s network (e.g. denial of service attack) Expense of retaining a public relations firm to help mitigate damage to the insured s reputation and brand image (typically sub-limited) Costs to investigate, negotiate and settle threats made against the insured related to intentional computer attacks Expenses for breach response services such as notification, credit monitoring and identity/credit repair chart source: amwins.com

10 QUESTIONS TO ASK What Professionals Need to Know First-party and third-party First-party business interruption not all carriers provide this coverage Notification costs Retroactive date Computer fraud & funds transfer/social engineering must buy separate crime policy or some carriers offer coverage under extension) Premium based on revenue and number of records debits/credits depending on controls such as HIPAA compliance, data base encryption etc. Shared or separate limits

11 EMPLOYMENT PRACTICES LIABILITY Colorado Specific Insurance Laws & DOI Requirements Voluntary coverage not mandated

12 EMPLOYMENT PRACTICES LIABILITY Protects businesses against claims brought on by employees who claim their legal rights as employees of the company have been violated. Examples of covered allegations: Sexual harassment Discrimination Breach of contract Wrongful termination Negligent evaluation Failure to employ or promote Wrongful discipline Deprivation of career opportunity Wrongful infliction of emotional distress Mismanagement of employee benefit plans Third party liability can be included to extend to employee claims against the employer by a third-party

13 QUESTIONS TO ASK What Professionals Need to Know Third-party coverage Defense costs outside limit Selection of counsel Prior & pending litigation date Continuity date Run-off and discovery period options Regulatory fines & penalties IRS fines & penalties Premium based on revenue and employee count Shared or separate limits Wage and hour claims Duty to defend Punitive damages not insurable Can be written as a stand-alone policy or packaged with Directors & Officers Liability, Fiduciary Liability and/or Crime EMTALA

14 Thank you. COLORADO: Matt Battey, Vice President ARIZONA: Larry Mueller, Senior Vice President cobizinsurance.com