Pitfalls and Perils of a Policy
Are you absolutely sure that your insurance policy protects you? You had better read your insurance policy contract to verify that.
In a previous TIP article called “Simple and Quick Reaction Steps If You Are Named in a Lawsuit”, we recommended that you conduct an audit of your insurance coverage at least every six months and determine if any coverage gaps exist. Coverage gaps mean that YOU are personally responsible and YOU stand alone.
Let us talk about General Liability and Professional Liability insurance since these are two of the most frequently purchased insurance policies by social workers. Cyber Liability is also growing in popularity since information breach (third party as well as a first party) is a growing incident and claim.
Beware of insurance brokers and insurance companies who do not disclose the full ramifications of an insurance policy contract to you. Insurance companies, particularly those that are driven by Wall Street earnings expectations, write strict coverage and often with very narrowly defined coverage parameters. Their intention is to maximize their own profits by narrowly defining a covered claim. The insured, YOU, are not covered when the claim arises because it falls outside of the narrow scope of defined coverage. The insurance broker is driven by commissions when the broker sells a policy.
For example, consider the aforementioned motives baked into today’s General Liability and Professional Liability policies because these are the two most frequently purchased policies by social workers and behavioral health practitioners.
Ask yourself these questions in the context of example policies that we use for discussion and illustrative purposes called “ABC” carrier …
- Does ABC’s policy cover me for my General Liability risk limits and my Professional Liability risk limits like other insurance carriers in the industry?
NO. The ABC policy limit is shared for PLI and GL related perils. The limits are not stacked. So your coverage limits are bleeding. If you buy ABC’s policy which says that it covers business liability and professional liability with a $1MM/$3MM limit, and you have a claim that is not PLI related, the benefit paid can exhaust all of your PLI limits so you have no coverage at all for malpractice professional liability claims. If you have a malpractice professional liability claim that uses up all of your coverage limits, then you have no general liability coverage at all. You are underinsured with the ABC policy. It is doubtful that your Landlord would accept your ABC general liability coverage once the policy language is read by the Landlord.
The NASW RRG PLI policy provides many of the client related GL perils at no additional cost. Plus the NASW RRG GL policy provides an additional $1MM/$3MM in coverage for all of the major general liability perils. So for example, if you buy a $1MM/$3MM NASW RRG PLI policy and an NASW RRG $1MM/$3MM GL policy, you actually have twice the coverage in place overall: $2MM/$6MM, plus insurance covering many perils that are not covered by ABC’s policy.
- If my client appears in my office for therapy and is accompanied by anybody else such as a parent, relative, friend, or guardian, and that person slips and falls in my office or down the hall, or in the bathroom, does the ABC policy cover me?
NO. The ABC policy only covers “Business Invitees” as strictly and narrowly defined in its policy contract. “Business Invitee” is only the person (client) who is at your office for therapy and actively in therapy with you at the time the incident occurs. The Business Invitee must be actively engaged in “Professional Services” as strictly and narrowly defined in the policy in order for you to be covered. If the client slips and falls in your waiting room, or gets injured in the bathroom, you are not covered. If anybody else gets injured, you are not covered because they are not a client and not in active “Professional Services” therapy. The ABC policy is very narrow and leaves you without insurance coverage in many instances.
The NASW RRG PLI policy and the NASW RRG NASW GL policy cover all people in your office, or in your building, no matter what, and even in hotel conferences, therapy, and training sessions with clients, peers, or anybody else who you are holding sessions with outside of your office. It does not matter if they are clients or not, and it does not matter if they are under active professional services therapy with you when the incident occurs. You are covered.
- I have delivery people like the U.S. Mail carrier, the FedEx person, UPS person, and other people stopping by my office all the time for many reasons. Some are clients dropping off papers, or just to visit unannounced, or other people stopping by my office on behalf of my client. Does ABC’s policy cover me if any of these people get injured on my premises?
NO. ABC’s policy only covers you for strictly and narrowly defined people and events. There must be a “Business Invitee” and active “Professional Services” therapy session during the incident, otherwise, you have no coverage.
The NASW RRG PLI policy and the NASW RRG NASW GL policy cover all people in or out of your office and your office building regardless of the reasons that they are in contact with you.
- What locations am I covered for from a General Liability perspective?
Virtually all carriers, except for the NASW RRG General Liability policy, charge an extra premium for each additional policyholder office. ABC’s policy only covers you for one single location. It does not cover you anyplace except for your office where the “Professional Services” is being delivered and to the “Business Invitee” (client only). That means it does not cover you if you have multiple offices. It does not cover you if you hold lectures and sessions in hotel conference rooms or other facilities for example. You are grossly exposed to risk. You are not covered at all because of these strict and narrow description definitions. There is no definition of office locations because only a single location is allowed.
The NASW RRG General Liability policy covers all general liability perils regardless of the number of offices that you have regardless of where you deliver your session therapy. An unlimited number of offices are covered.
- Is damage to my client’s personal property covered by ABC’s policy?
NO. Not even the client or anybody for any reason.
The NASW RRG PLI policy and the NASW RRG NASW GL policy cover all property from damage, or loss from theft in or out of your office, in hotel conference rooms where you are conducting sessions or lectures in other locations.
- Are my associates covered such as psychologists under ABC’s policy?
No. Do not count on coverage across related occupations to social workers. Psychologists are not named as insureds and not specifically listed as “Professional Services” in ABC’s policy.The NASW RRG PLI policy covers all psychologists, mental health workers, and social workers.
The NASW RRG General Liability policy covers all occupations in the Allied Health category.
- What are “Professional Services” defined as in the very strict and narrow ABC policy?
Only social workers and mental health services are permitted. No psychologists are covered. They are specifically excluded. Many carriers only cover three activities: a) providing social work or mental health services with formal accreditation, credentialing or standards review or from similar professional boards or committees; b) publishing articles or books or broadcasting on radio or television activities directly related to Professional Services, or c) providing formal clinical teaching activities. This means that if you perform any other activities than those strictly listed above, you are not covered.
The NASW RRG PLI policy covers all psychologists, mental health workers, and social workers with very broad coverage. The NASW RRG General Liability policy covers all occupations in the Allied Health category with very broad coverage the same for all of these occupations.
- What Exclusions hurt me in ABC’s policy?
Several Exclusions will hurt you. Many carriers do not cover Divorce Mediation Services, and if they do, only in a limited fashion, where you must follow a strict and heavily defined procedure of notices and written statements to all parties, and require that all agreements between the parties involved are reviewed by a lawyer, and you are responsible for paying for those lawyer fees.
Many carriers do not cover you for anything arising from an electronic dissemination of faxes, emails, text messages, or similar communications to the prospective patient, “Business Invitee” or any other third party. You are not covered for the dissemination of electronic information and backup tapes, optical media or portable media.
Many carriers do not cover any psychologists. They are expressly excluded from any coverage offered to social workers.
Many carriers do not cover fire damages over $150,000 regardless of the number of claims presented under the policy. That means that you are underinsured for each incident and most probably only for part of one incident.
The NASW RRG PLI policy covers all psychologists, mental health workers, and social workers with very broad coverage.The NASW RRG General Liability policy covers all occupations in the Allied Health category with very broad coverage the same for all of these occupations. Also covered are all first party information dissemination incidents regardless of type. The NASW RRG insurance policies are very comprehensive.
- Some carriers require you to disclose your personal health information in order to buy the liability insurance, including disclosing if you have ever been treated for a serious health problem that did or can impair your ability to treat clients. If you answer yes, you have to provide full particulars.
The NASW RRG Professional Liability and General Liability do not ask these types of personal questions. The NASW RRG is very liberal in coverage and is devoted to the welfare and success of the NASW members. Coverage benefits and excellent insurance coverage are more important to the NASW RRG than profits.
Again, conduct an audit of your insurance coverage. That means read the policy contract, not just the Declarations page. Make sure that you understand what you actually have coverage for. First and foremost, review your own existing insurance policies to determine what insurance coverage is stated compared to what you need and identify the gaps that exist for which you are not covered. This applies to your professional activity as well as your auto and homeowners policies, and even your life and health insurance coverage.
The NASW Assurance Services organization is committed to social workers and is not driven by Wall Street profit demands. The NASW Assurance Services organization offers all kinds of insurance with generous and liberal provisions, including professional liability, general liability, cyber liability, cyber device liability, term life, health insurance, and auto and home insurance.
The NASW Risk Retention Group offers a suite of policies including:
Professional Liability policy
Cyber Liability policy
General Liability policy
Cyber Device Liability policy
Published May 2016