Minnesota Employment Law – Workers Compensation & Employer Penalties
Sexual abuse insurance claims in the healthcare industry
The type of claim that’s currently having the biggest effect on insurance carriers are sexual abuse claims. These have been front and center in the media with the Larry Nassar cases at Michigan State, George Tyndall at USC, and Earl Bradley at Beebe Medical Center in Delaware – the latter is an older case involving pediatrics. With the #MeToo movement continuing to gain momentum, there’s no reason to believe these claims won’t continue impacting insurance carriers in the future.
If you’re the administrator of a healthcare facility, your next question should be, “my malpractice policy covers sexual abuse, correct?” The short answer is maybe. Suppose 20 years ago it was common not to see any exclusion for sexual abuse claims. Then the hard market of the early 2000’s hit. One of the causes of the hard market was the large number of sexual abuse claims that nursing homes had to contend with. Before the hard market, insurance policies were silent and typically took the stance that if the courts determined the claim was malpractice, then it was covered. Usually, the insurance carriers would provide coverage up until it was determined that the claimant was guilty and then they would exclude coverage due to the exclusion in the policy for violations of the law.
With these class action lawsuits affecting insurance carriers, they needed to be more proactive and would add more restrictive wording or, in a lot of cases, would provide a sublimit of coverage. While it was nice to have a separate limit of coverage for sexual abuse claims, they wouldn’t be close to the limits they had for malpractice and if they had umbrella coverage, these claims wouldn’t fall under that limit.
Today, sexual abuse coverage takes on many different forms. From policies being completely silent to full blown exclusions, you must be sure to review your policy so you’re aware of the coverage provided. While everybody understands not providing insurance coverage to a criminal, you’ll want to be sure your company has coverage for any vicarious exposure you may have for unwittingly employing a sexual predator. Also, be sure you’re aware of the carrier’s stance on punitive damages — these may be tacked on, depending on whether the jury wants to make an example of the facility. Some carriers will provide coverage depending on whether the state will allow punitive damages to be covered by insurance (some states won’t allow this because it defeats the purpose of punishment). Many carriers will flat out exclude these types of claims, so that’s something to be aware of.
Taking all this into consideration, it’s imperative you have a comprehensive background check to ensure you’re able to weed out potential questionable hires. Not an easy task when it’s tough to find qualified candidates, but as you’ve seen the alternative could bankrupt a facility.
Needle-sticks and workers compensation insurance
One of the most common workers compensation claims for hospitals and physicians are needle sticks. These claims are problematic for insurance carriers since there’s the potential for the employee to contract an infectious disease. Over the years employers and insurance carriers have leveraged technology and history to simplify and reduce the cost of testing and time away from work before being cleared. It’s important that you discuss this with your insurance agent to see how insurance carriers in the marketplace handle needle sticks because some carriers will pay for the initial testing and some won’t. It’s imperative that these claims are reported in a timely fashion to ensure the company isn’t violating laws. Also, you need to review what risk management services the insurance carrier provides to prevent these claims in the first place.
Employee Dishonesty Coverage
One train of thought with the upturn in the economy is that employees may be emboldened to steal from their employers, and studies show that these losses total approximately $400 billion annually in the US. These claims tend not to make big headlines, but they can have a serious impact on a company’s bottom line.
There are many ways in which an employee can steal from his or her employer. Here are some examples that apply to healthcare entities:
• Billing schemes
Since there’s no requirement that a company buy crime insurance, it’s often overlooked. And because there is no requirement, there’s little guidance on determining the appropriate limit of insurance.
Here are some websites we share with clients to provide basic information that will educate them on the coverage, as well as offer some risk management tips.
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