FAQ's: STATUS OF FLORIDA PROFESSIONAL LIABILITY
COVERAGE
Question # 1 I understand that the insurance
carrier that writes ADA's professional liability
insurance for ADA members may be re-evaluating
the structure of this insurance. Is this true?
The carrier, Chicago Insurance Company (CIC)
is taking a look at its coverage of dietitians,
and other health care providers, who work at nursing
homes and long-term care (LTC) facilities to determine
whether it should limit the coverage or increase
the premiums.
Question #2: What has prompted this action?
The insurers in this marketplace have noticed
a significant increase in the number of personal
injury or wrongful death claims against nursing
homes and LTC facilities and the health care providers
who work in them.
Question #3: Why does that require a re-evaluation?
The coverage that's offered and the premiums
that are charged are determined at the outset
by an insurer's assumptions with regard to the
amounts that will have to be paid out over the
term of the coverage. When those assumptions prove
to be false, it affects the insurer's "loss
ratio" and affects its profitability.
Question #4: Is this issue limited to dietitians?
No, it affects all health care providers in the
LTC context. When the plaintiffs' attorneys bring
lawsuits because of injuries or deaths at a facility,
they name as defendants any and all providers
who have treated the injured individual.
Question #5: Are dietitians being found liable
for the injuries or deaths?
To date, we're not aware of any dietitians who
have been found liable.
Question #6: Then why does this affect the loss
ratio?
The insured dietitian's coverage is not limited
to judgments that may be rendered, but also to
the costs of defense and related attorneys' fees.
Often, the litigation costs can be more substantial
than a judgment, and those costs are incurred
even if the case is ultimately dropped or dismissed.
Moreover, it may become more economical for the
insurer to pay a settlement than to take on the
enormous costs of the lawsuit.
Question #7: Will all dietitians' coverage be
affected, or just those who are working at the
LTC facilities?
Good question. We don't yet know the answer to
that question, but we will try to influence the
insurer to minimize the effect. The insurer could
elect to have all dietitians share in this increased
cost, or it could simply modify the coverage or
raise the premiums of those who are directly affected.
We have been advised, however, that CIC intends
to include questions on its insurance application
that will seek information about the percentage
of an applicant's practice that occurs at an LTC
facility.
Question #8: Is it possible that the insurer
would refuse to provide coverage to dietitians
working at LTC facilities?
We hope not, but it's not impossible. The insurer
has generally been receptive to our comments and
suggestions and ADA will work hard to avoid such
a drastic result.
Question #9: Are there an increased number of
professional liability claims across the country,
or only in specific areas?
The real increase that recently became apparent
was in Florida and Texas. The insurer is fearful,
however, that the popularity of such a claim will
spread to other states.
Question #10: Why does a relatively small increase
in the number of lawsuits have such a substantial
effect on the loss experience?
Mainly, it's because ADA had negotiated such
a favorable premium for dietitians. Since there
is a relatively small amount of premiums being
collected, it only takes a claim or two eating
up tens of thousands of dollars to make an impact.
Question #11: Would it make sense to contact
other carriers to avoid the re-evaluation that
the carrier is conducting?
You may certainly seek other quotes if you like,
but ADA is confident that we will continue to
secure the most favorable rates in the marketplace.
In addition, you should be aware that some of
the competitors of CIC have already begun to cancel
or refuse coverage for health care providers in
the LTC context.
Question #12: Is there anything else that we
should be doing?
There are certain things that dietitians working
at LTC facilities can do. First, you should check
to see if your facility maintains insurance coverage
for your activities. If not, you should urge it
to do so. You may wish to check your contract
with the facility, if there is one, to determine
whether the facility has taken on this obligation.
In addition, some pressure might be taken off
if all the facilities even carried their own coverage,
which some do not. It may be advantageous at some
point to urge the state legislatures to require
that LTC facilities maintain sufficient insurance,
but we are not aware of any states that do so
at this time.
And finally coming up in August…
