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Expectations from tax payers, donors, bond holders, and regulatory agencies have never been higher with regard to the quality of governance of healthcare institutions. At least 25 states have passed legislation that extends some of the Sarbanes-Oxley standards to private and non-profit Healthcare institutions.1 Heightened demands put pressure on board members both in terms of the time they must commit and the skills they must possess to be effective. With greater responsibility comes increased exposure to their personal assets.
Our Healthcare A-side Difference in Conditions (DIC) form provides Directors and Officers with personal asset protection in situations where other sources of insurance or indemnification fail or are not available. We offer a comprehensive policy that will respond either as follow-form excess coverage or as a "drop-down difference in conditions" policy in situations where loss is not paid by the underlying insurance.
Major Coverage Highlights Include:
- Dedicated limits for Insured Persons, not to be shared with or diluted by the entity
- Broad Definition of Loss, including most favorable venue wording for punitive damages and sub-limits for EMTALA Fines
- Broad Definition of Claim, including civil, administrative or regulatory proceedings and investigations
- Broad Definition of Insured Person, including Directors and Officers (and worldwide functional equivalents), employees, volunteers, trustees, member managers, faculty members, medical staff members, members of any duly constituted committee, and spousal equivalents
- Full severability of the application and all exclusions
- Non-rescindable wording available by endorsement
- Excess Benefit coverage available by endorsement
- Dedicated Fraud & Abuse Limits available by endorsement
- No retention, unless required by law
- No Presumptive Indemnification language
- No Insured v. Insured Exclusion
- No Pollution Exclusion
- No HIPAA Exclusion
- Automatic coverage for created or acquired subsidiaries up to specified threshold, with 90-day window provided for those that exceed the threshold
This policy may respond in the following situations:
- Because a D&O policy is purchased by and typically provides coverage for the organization, the proceeds of the policy may be treated as an asset of the entity in a bankruptcy proceeding, making the proceeds potentially unavailable to the Insured Persons for loss or defense expenses. Under the Healthcare DIC policy the organization is not an insured and therefore the policy will respond for the sole benefit of the Insured Persons.
- Insolvency of Insured organization or underlying insurance carriers
- Underlying D&O limits are consumed by another claim (Entity, Government Fraud & Abuse, Antitrust, Employment Practices, etc.) and are no longer available to protect the individual insureds
- Organization fails or refuses to indemnify, regardless of its obligation to do so
- Limited exclusions in the DIC form provide for possible drop-down coverage if loss is otherwise excluded by the primary policy
- Law or public policy prevents the organization from indemnifying the individual insureds
OneBeacon Professional Partners' Healthcare DIC policy provides personal asset protection dedicated solely to individual Directors and Officers at a time when they need it most.
Download D&O Applications and Policies
1Relevance and Implications of Certain Provisions for Non-Public Healthcare Organizations, PriceWaterhouseCoopers, January 2004.
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