Liability Insurance 101. Liability Insurance 101. Larry Hornsby, CRNA, BSN

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1 Liability Insurance 101 Liability Insurance 101 Larry Hornsby, CRNA, BSN

2 Liability Insurance Liability Insurance Defined Contractual Relationship Insurance Company agrees to provide a service CRNA/MD/Company agree to terms Secured with premium payment

3 Insurance Company Agrees to: Insurance Company Agrees to: Pay all expenses related to a filed claim Attorney fees Expert witness Time out of work to testify Investigation Judgment or Settlement

4 Typical CRNA Coverage Typical CRNA Coverage Individually Purchased Employer Purchased May share limits with MD May share limits with group Individual Limits Corporate Limits

5 Limits of Liability Limits of Liability Usual $1,000,000/$3,000,000 May add separate corporate limits May have facility or state mandated limits May purchase additional coverage limits Beware of DEEP POCKETS

6 Shared Limits Shared Limits CRNA and MD share limits of policy May have entire group sharing limits KNOW your coverage CRNA may purchase personal policy

7 Moonlighting Coverage Moonlighting Coverage Most employer policies will NOT cover work outside the practice AANA Insurance offers moonlighting policy Inexpensive insurance based on State Ask for written Certificate of coverage if facility is covering insurance listing YOU as a named insured

policy Inexpensive insurance based on State Ask for written Certificate

8 Denied Coverage Denied Coverage Open or existing claim Loss History Substance Abuse Physical Limitations Gaps in Practice Licensing/Credential Issues No Tail purchased with last policy

9 Special Considerations Special Considerations New Graduates may be denied coverage outside of hospital setting Substance abuse may require upto five years clean Large judgment may require prolonged investigation prior to new coverage Pending litigation makes new coverage difficult

require upto five years clean Large judgment may require prolonged

10 Rating The Company Rating The Company A.M. Best: Oldest independent rating Based on ability to pay claims Superior: A++ or A+ Excellent: A or A- A Very Good: B++ or B+ Anything less is problematic!!

11 Rule to Live By Rule to Live By If it is too good or too cheap or too easy to acquire.don T BUY IT!!!!! Many CRNAs have been hit by Insurance Companies exiting the market and were left with no coverage and no potential to purchase tail coverage. Be careful!!

!!!! Many CRNAs have been hit by Insurance Companies exiting the

12 Occurrence Coverage Occurrence Coverage Covers incident that occurred while policy was in force Coverage is NOT based on WHEN the claim is filed No Tail Coverage Hard to find in current market

13 Claims Made Coverage Claims Made Coverage Covers CLAIM that occurs during policy Claim MUST be filed during policy period Tail MUST be purchased to cover claims filed after term of policy BEWARE of definition of Claim Beware of Time limitation on Tail coverage

Tail MUST be purchased to cover claims filed after term of

14 Claims Made Concerns Claims Made Concerns Unlimited Time on Tail Some Limit to ONE YEAR!! KNOW WHAT YOU HAVE!! Definition of Claim Suit filed and Served vs ANY Communication regarding an incident with POTENTIAL for claim KNOW WHAT YOU HAVE!!!!!!!!

! Definition of Claim Suit filed and Served vs ANY

15 Claims Made Coverage Claims Made Coverage Premium Low first year Increases each year until 5 th year Always ask for the current 5 th year rate Budget based on increasing premiums Premium increases as risk of claim increases with each year s case load

current 5 th year rate Budget based on increasing premiums

16 Limits of Liability Limits of Liability Per Occurrence Max per CLAIM $1 Mil/$3 million New Limits with renewal Aggregate Max for ALL Claims $1 mil/$3 MILLION New limits with renewal

17 Questions to ask the Company Questions to ask the Company Deductible: A predetermined cost that may be assessed at the time of the claim or at the time of a judgment Covered Cost: Are ALL defense costs covered under your policy including lost wages due to depositions and required presence at hearings?

time of a judgment Covered Cost: Are ALL defense costs covered under your

18 Consent to Settle Consent to Settle Company MUST have your written consent before making a decision to settle a case. Important due to National Data Bank ANY Settlement may also trigger investigation by State Board of Nursing

19 Employer Provided Coverage Employer Provided Coverage Things you should know Occurrence vs Claims Made Is tail coverage available should you leave Who will pay for the tail Will you get documentation of paid tail How much will it cost if you must pay Will you be able to purchase new policy if no tail is available

pay for the tail Will you get documentation of paid tail How much will it cost

20 Employer Provided Coverage Employer Provided Coverage More Questions Do you get a certificate of insurance Who is the company/underwriter Do you have separate limits of liability Do you have separate legal counsel Is there a consent to settle clause Are you a named individual on the policy

have separate limits of liability Do you have separate legal counsel Is

$1 Mil $1 Mi / $3 MILLION New limits with renewal Intended to PUNISH Must work within Licensure and Usually LARGE award Scope of Practic Scope of

$1 Mil $1 Mi / $3 MILLION New limits with renewal Intended to PUNISH Must work within Licensure and Usually LARGE award Scope of Practic Scope of Liability Insurance What You Don t Know Can Hurt You Larry Hornsby, CRNA, BSN Liability Insurance Defined Contractual Relationship Insurance Company agrees to provide a service CRNA/MD/Company agree to