Incidental medical malpractice coverage covers claims arising from healthcare services that an employer provides on an incidental basis. It's often provided as part of an "extended coverage" endorsement to general liability insurance that's offered by many insurers.
This coverage is intended for companies that employ healthcare workers, but that aren't actually in the business of providing healthcare services.
What Is Incidental Medical Malpractice Insurance?
Incidental medical malpractice insurance covers acts committed by certain medical professionals who are employed by a business that doesn't otherwise offer healthcare services. General liability policies first offered this type of coverage in 1976 to cover employees who don't work for healthcare providers.
There's no standard endorsement, so the scope of coverage can vary from one insurer to another.
Incidental medical malpractice coverage is not intended to serve as a healthcare worker's main source of professional liability insurance. It applies on an excess basis over other available insurance. Incidental malpractice coverage would apply after a nurse's medical malpractice insurance has been used up if a claim is filed against someone who is insured under a professional liability policy.
How Incidental Medical Malpractice Works
Understanding how an incidental medical malpractice endorsement works begins with what happens without such an insurance provision.
As an example, Happy Havens is a private company that provides temporary shelter to people in need. The company employs Beth, a part-time nurse, 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, either Happy Havens or Beth could be sued by someone who alleges that they were injured as a result of healthcare services Beth provided or failed to provide.
Assume that Happy Havens is the named insured on a general liability policy that doesn't 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 has sued both Beth and Happy Havens. Jim's suit against Beth alleges that she provided him substandard medical care because 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.
This lawsuit would have been covered by an incidental medical malpractice endorsement.
Types of Incidental Malpractice Endorsements
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 endorsements cover specific services, such as medical, surgical, dental, laboratory, x-ray, or nursing services. Some cover injuries arising out of first aid provided by an employee, regardless of whether the employee is a medical professional. Some cover injuries caused by an employee acting as a Good Samaritan.
The Employee Professional Exclusion
Some endorsements afford incidental malpractice coverage by amending the employee professional exclusion.
Happy Havens' liability policy wouldn't cover the suit against Beth because it includes this exclusion in a section entitled, "Who Is An Insured." This exclusion states that no employee is insured for bodily injury or for 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. His suit against Beth is therefore excluded under Happy Havens' liability policy, but it would have been covered by an incidental medical malpractice endorsement.
As for Jim's suit against the company, it must seek damages for bodily injury caused by an occurrence to be covered under Bodily Injury or Property Damage Liability. The suit might be covered by the company's liability policy if Jim's suit alleges that he sustained bodily injury as a result of an accident attributable to Happy Havens' negligence.
The Employer's Liability Exclusion
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. Happy Havens' liability policy wouldn't cover these lawsuits, either.
General liability policies don't cover suits against employers by injured employees. Such suits are excluded by the employer's liability exclusion.
The Fellow Employee 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 always file a claim under their employer's workers compensation policy, even when an incidental medical malpractice endorsement is in place. Claims filed against their employer or a co-worker, including an employed medical professional, are not likely to be successful.
- Incidental medical malpractice endorsements cover businesses that don’t provide healthcare services but nonetheless employ healthcare workers.
- This type of coverage addresses legal claims that are “incidental” to the company’s or organization’s purpose.
- Incidental medical malpractice endorsements can cover emergency medical personnel such as paramedics or volunteers, and even Good Samaritans.
- This insurance coverage would pay out after an employee’s personal professional liability policy is depleted.