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As we all know, rest, convalescent or nursing home facilities and their administrators are legally liable for injuries caused by negligent rendering of services to residents. Most facilities carry Commercial General Liability and Professional Liability (CGL/PL) insurance which is a prerequisite to purchasing individual coverage. The CGL/PL policy typically defends and indemnifies the individual administrator(s) as well as the facility. This is the point at which most administrators stop being concerned about their personal liability arising from their job.
What is VitalCare?
VitalCare is a new product known as individual employed healthcare administrator's professional liability insurance (individual coverage). Individual coverage is available to employed administrators working in independent living, assisted living and skilled nursing facilities.
Why should you consider buying it?
There are no guarantees that a facility's insurance will be there to defend and indemnify an administrator. In some cases, in the course of an insurance company's defense of a healthcare facility against allegations of negligent care, conflicts of interest can arise pitting the facility against the administrator. In other cases, with multiple defendants, the facilities limit of liability (maximum amount the insurance company will pay) is now stretched between the facility, the administrator and any other defendants named in the lawsuit. The limit of liability may actually be exhausted as in many instances the costs of defense, as well as payments available to plaintiffs, comes out of the limit of liability.
Take the case where a lawsuit naming a facility and an administrator as defendants settles for $600,000 in damages and claims costs. If the facility carried a $500,000 limit of liability and the case settles for $600,000, apportioning 80% negligence to the facility and 20% to the administrator, where does the $100,000 shortfall come from? Individual coverage will step in with a $100,000 limit of liability for the administrator. In another scenario, suppose a facility carries PL but without the administrator's knowledge the facility drops the insurance or it is cancelled. The individual coverage will step in with a $50,000 limit of liability for the sole benefit of the administrator after a $5,000 deductible. Suppose the facility had a previous claim that has exhausted, or greatly diminished, the limit of liability available for subsequent claims. Individual coverage will step in with a $100,000 limit of liability for the administrator.
What does it cover?
VitalCare covers claims from Errors & Omissions made as an employed healthcare administrator such as claims arising out of negligent hiring or alleged failure to train/supervise employees properly and monetary damages arising from any of the following: Civil Action, Arbitration, Suits, Mediation, Proceedings & Demand. Individual coverage is not meant as a substitute for a facility's CGL/PL but rather as a compliment to that extremely important coverage. It is a coverage that facility owners are now considering as the next employee benefit to be offered to administrators as part of their compensation package.
The important fact to remember is that administrators are personally liable for their conduct and need protection from liability lawsuits that allege such things as negligent hiring, failure to properly train and a failure to properly supervise. Individual coverage can be thought of as a “personal umbrella” to work in concert with the facility’s PL coverage on an excess basis.
To download a copy of the VitalCare Fact Sheet click here.
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