Nearly one year ago, at the beginning of the COVID-19 pandemic, James McNitt, RPS Healthcare Area President, weighed in on how the pandemic was impacting the healthcare insurance market. The pre-COVID insurance market was already firming and has continued to do so with rate increases and policy term limitations for General Liability and Professional Liability coverage. Carriers that were struggling pre-pandemic have left the market while others have made policy and/or appetite changes.
"In the wake of the pandemic, we now have an environment in which some carriers have mandatory COVID exclusions in their policy forms while others exclude pandemics, but not all airborne pathogens or communicable diseases, and still others have no expressed COVID exclusions for medical professionals or healthcare entities," explains McNitt.
"There are insureds opting to go with an insurer that doesn't have a COVID exclusion in the policy. They will pay the additional premium as they associate value with a policy that contains no exclusion."
Coverage for Testing and Vaccination-Administration Sites
Throughout 2020 and into 2021, RPS has insured many testing sites, and is now writing coverage for COVID vaccination-administration sites.
"The risks for entities administering COVID tests appears to be minimal so far," says McNitt. "Medical negligence would be covered under the Professional Liability policy, but if the product fails, whether it's a false positive or any other issue with the product itself, the entity or individual administering the test would not be liable. This would be a product liability issue covered under the manufacturer's policy."
McNitt noted that so far the same applies to COVID vaccination-administering sites, where "the risk of a bad outcome as a result of professional negligence appears to be minimal."
Beyond Healthcare Entities: Insuring Schools and Others Providing Vaccinations
In addition to healthcare entities administering the vaccine needing Professional Liability insurance, so do community centers, mobile ambulances and schools engaging in immunizing the public.
For example, under an Educator's Legal Liability policy, schools providing vaccinations would not be covered for their professional liability risks related to this activity.
"We are offering a standalone policy that insures the school and those administering the vaccines, which may include more than just medical professionals; it could be parents who are volunteering to help get individuals vaccinated. We have a wide range of policy forms available that are broad enough to provide coverage for the first-named insured and those working on behalf of the insured including volunteers," explains McNitt.
As a result, agency retailers that specialize in insuring educational institutions are turning to the Healthcare division to write Professional Liability insurance for their school vaccination sites.
Preparing for COVID-Related Claims
In discussing potential professional liability-related COVID claims costs, McNitt sees carriers setting aside reserves for potential payouts, which ultimately impacts rates and premiums, though there has yet to be court precedence for medical negligence.
"Carriers are calculating reserve costs associated with claims management," says McNitt. "For example, we insure many nursing homes, including facilities in New York, which are reporting claims for every single fatality and/or COVID case that came through their nursing home. There is a cost associated with setting up each claim – even if pure medical negligence is not found to be the cause of a loss."
The RPS Healthcare Division is available to assist you with your clients' Professional Liability insurance needs. As the pandemic continues to evolve, we will keep you updated on the latest developments and the impact on the insurance market.