Insurance claims involving professional services are on the rise – from Errors & Omissions for real estate agents, title agents and home inspectors to professional liability exposures for tech consultants, attorneys, medical groups, and so on. Regulation has made things even more difficult.
For example, the Affordable Healthcare Act has laid the groundwork for new healthcare delivery models called Accountable Care Organizations (ACOs). This is when medical providers (hospitals, doctors, facilities) come together to provide Medicare patients with a continuum of care. The idea behind an ACO is that the quality of care is improved, costs are lowered because you reduce the rate of repeat hospital admissions, a contribution is made to the community at large – and we work toward keeping the system solvent. But along with this new model comes emerging exposures.
ACOs establish procedures and processes for the care the providers offer – such as the type of treatment for a specific illness, how much medication, etc. If an error occurs during the treatment, the patient can allege that it is the responsibility of the ACO, as the providers were following the organization’s procedures. Physicians and nurses can also allege that they were following ACO protocol. This squarely puts the onus on the ACO with third-party liability. An ACO also has Directors & Officers Liability exposures due to its operation – all pricing and information is shared among the providers so you run the risk of antitrust liability. There are safe harbors established by the various government agencies so an ACO can reduce its exposure…but it’s still critical to have the right coverage in the event there is a claim. What’s more, an ACO is vulnerable to cyber exposures as it’s receiving all patient information and storing it one location. One data breach can cause privacy exposures, reputational damage, and penalties and fines from the government. The appropriate cyber insurance is needed.
The real estate industry – from agents and property managers and developers to owners – is also vulnerable to a number of professional liability exposures. For example, as the economy improves and the commercial market begins to open up, real estate developers and agents may be pressured to close a sale immediately, affecting the way financial details are managed. This can cause errors and omissions and land an agent or developer in court defending a claim.
Professional Liability coverage is available tailored to different industries. It’s important work with independent insurance agent that has access to various niche markets to get the right policy and who understands the profession and what it is required.