What Is Incidental Medical Malpractice?
Many insurers that provide general liability insurance offer a coverage extension called incidental medical malpractice. This coverage is intended for companies that employ healthcare workers, but aren't in the business of providing healthcare services.
Incidental medical malpractice insurance may be added to a general liability policy. It is often provided as part of an "extended coverage" endorsement. It covers claims arising from healthcare services that an employer provides on an incidental basis. Here is an example.
Happy Havens is a private company that provides temporary shelter to people in need. The company employs a part-time nurse named Beth who treats minor injuries sustained by shelter residents. Beth counsels clients about health and directs them to social programs that provide free medical care. She also provides first aid to any Happy Havens employees who are injured on the job.
Happy Havens' business is sheltering the homeless, not providing healthcare services. Nevertheless, Happy Havens or Beth could be sued by someone who alleges they were injured as a result of healthcare services Beth provided or failed to provide.
Healthcare Professional Lawsuit
In the following scenario, assume that Happy Havens is the named insured on a general liability policy that does not include incidental medical malpractice coverage. Jim is a client of Happy Havens. Jim is at the shelter one morning when he discovers a splinter lodged in his right forefinger. Beth removes the splinter and treats Jim's injury. She doesn't see or hear from Jim until she is served with a lawsuit six months later. Jim is suing Beth and Happy Havens.
Jim's suit against Beth alleges that she provided him substandard medical care. Because of the inferior treatment she provided, Jim's finger became badly infected. The infection was so severe that his finger required amputation. Jim's suit against Happy Havens alleges that the company is partly liable for his finger ordeal because it negligently employed an incompetent nurse. Will either of the suits be covered under Happy Havens' liability policy?
Employee Professional Exclusion
Happy Havens' liability policy will not cover the suit against Beth. The reason is an exclusion found in the section entitled "Who Is An Insured." This exclusion states that no employee is insured for bodily injury or personal and advertising injury arising out of their providing or failing to provide professional health care services. Jim's suit against Beth is based on her alleged failure to provide adequate healthcare services. Thus, his suit against Beth is excluded under Happy Havens' liability policy.
What about Jim's suit against the company? To be covered under Bodily Injury or Property Damage Liability, a suit must seek damages for bodily injury or property damage caused by an occurrence. If Jim's suit alleges that he sustained bodily injury as a result of an accident attributed to Happy Havens' negligence, the suit may be covered by the company's liability policy.
Incidental Malpractice Coverage
Incidental medical malpractice insurance covers acts committed by certain medical professionals employed by a business. There is no standard endorsement, so the scope of coverage varies from one insurer to another. Some endorsements afford incidental malpractice coverage by amending the employee professional exclusion cited above. Others provide coverage by expanding the definition of bodily injury to include acts committed by various healthcare professionals employed by the business.
Many endorsements limit coverage to certain types of professionals, such as nurses, emergency medical technicians, and paramedics. Some cover specific services, such as medical, surgical, dental, laboratory, x-ray and nursing services.
Some endorsements cover injuries arising out of first aid provided by an employee, whether or not the employee is a medical professional. Some cover injuries caused by an employee acting as a Good Samaritan.
Incidental medical malpractice coverage is not intended to serve as a healthcare worker's main source of professional liability insurance. Thus, it applies on an excess basis over other available insurance. For instance, if a claim is filed against an employed nurse who is insured under a professional liability policy, incidental malpractice coverage will apply after the nurse's medical malpractice insurance has been used up.
Employee Suits Not Covered
In the Happy Havens example outlined above, suppose that Jennifer, a clerical worker at the facility, is injured on the job in a slip-and-fall incident. Beth provides first aid until the ambulance arrives. Jennifer later develops an infection and sues Beth and Happy Havens for bodily injury. Will Happy Havens' liability policy cover either suit? The answer is no.
General liability policies don't cover suits against employers by injured employees. Such suits are excluded by the employer's liability exclusion. Liability policies also exclude suits filed by one employee against another. Suits between co-employees are excluded via the fellow employee exclusion. Employees injured on the job should file a claim under their employer's workers compensation policy. Claims filed against their employer or a co-worker (including an employed medical professional) are not likely to be successful.