Avoiding Insurance Coverage Gaps
Check your insurance policies to make sure that you have coverage. Last month we talked about reading and analyzing your professional liability insurance policy for loopholes and exclusions that are not clearly identified which leave you exposed.
It all starts with the basics. First, do not assume that your employer will cover you, even if you are a student working for an agency. Next, look at the insurance policies that you need for your own protection, including cyber liability, general liability, and professional liability. Many do not cover you as comprehensively as the NASW Risk Retention Group policies.
Here is a real case in point that recently occurred …
A social worker student on assignment at a social work agency, Gail Goodbody (not her real name), worked for a short period of time for the agency while on a break from her social work studies at college. Gail completed her work assignment and continued back in college. Gail assumed that the agency’s insurance would cover her. While working on this short stint at the agency, Gail was involved in a case with her agency associates regarding a domestic dispute between a married couple. The husband was ordered to attend counseling sessions, and as a result, his firearms permit was taken away. The husband filed a lawsuit naming Gail as one of the defendants, even though Gail was back at college. Gail had no insurance coverage and the agency’s insurance carrier did not defend Gail. Gail is now faced with paying for her legal defense expenses which will probably start at $1,500 and could be as high as $5,000. If Gail had bought her own individual professional liability policy, she would be defended for up to $1,000,000 with first dollar coverage and with no deductible.
Here is another example. Betty Counseling (not her real name), sent a fax with her patient’s name on the letter referencing a recent case meeting. Betty accidentally reversed the last two numbers in the fax telephone number and the fax was misdirected to another unknown fax machine. That act immediately triggered a violation information breach and a state licensing board notice and inquiry. Betty reported the incident to her insurance carrier and it was immediately processed as a valid claim with all of Betty’s expenses paid. The professional liability policy covers these types of claims, and Betty did not have to pay any costs which amounted to over $1,500 in legal fees.
It pays for you to check your professional liability policy to verify what’s covered.
At a national June 2016 insurance conference, the most important claims related topics were discussed which were about information breach regarding patients or customers. This is the highest priority issue in the insurance industry currently because information breach is the fastest growing peril in the insurance industry. In 2015, more than 847 million records were exposed either through paper disclosure or by cyber means. (www.idtheftcenter.org)
The information most sought after in identity theft is your patient’s name, address, and social security number. This information sells for over $100 per name on the black market and enables individuals to procure a credit card, a driver’s license, and even a loan in the victim’s name. Congress recognized this problem, and in 2013 began enforcement of the HIPAA HITECH 45 CFR Part 160 law. This law makes you directly responsible for breach of patient information, regardless of whether the breach occurred by you or by a third party working for you such as a mover of paper files, a warehouse records storage facility, or an internet or data repository. Civil penalties range from $100 to $25,000 per occurrence and up to $1.5 million for willful neglect. Criminal penalties range from 1 year to 10 years in prison with fines from $50,000 to $250,000.
You are also liable for legal fees, fines and penalties, licensing board inquiry and legal defense, damages to the victim, paying for an identity theft protection subscription for the victim, a security review, and audit of your practice conducted by a professional, and notifying each patient by mail of the breach. The costs are staggering and could bankrupt your practice.
This peril can be contained or eliminated with the purchase of a cyber liability insurance policy.
We can’t say it enough, “medical records requests” and “breach of confidentiality” are the leading claims risks for the social work profession. These claims trigger lawsuits, licensing board inquiries, and HIPAA information breach liability, particularly regarding HIPAA HITECH 45 CFR Part 160, that holds you liable for third-party, and first-party breach. The NASW Risk Retention Group offers a variety of cyber liability and cyber device insurance products that protect you. Also, the NASW Risk Retention Group professional liability insurance policy has some first party coverage for records breach as well. Many other insurance providers exclude this coverage.
Potential liability is now a fact of the social work profession regardless of role, context, or venue. You cannot assume that your employer or school will cover any and all liability. That is why you must always carry your own individual professional liability policy, a cyber liability policy, and in many cases, a general liability policy.
There are a lot of liability risks that can hurt you financially and professionally, regardless of your status as a student, an employee, or as a sole practitioner. The best way to stay ahead of the damages and risk curve is to regularly attend NASW Risk Management Workshops, follow the NASW Code of Ethics and NASW Practice Standards, stay up-to-date on local laws, policies and rules and utilize the NASW Assurance Services free Helpline available to NASW member liability policyholders to learn what to look for when shopping for a good set of liability insurance policies to protect yourself.
NASW Assurance Services offers a comprehensive set of low premium, high coverage liability insurance policy plans that are insured by the NASW Risk Retention Group that is owned by the policyholders, endorsed by the NASW with controlling Boards comprised of seasoned social workers
Published July 2016