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Pregnancy Resource Center Investigative Insurance Questions

Liability insurance is a necessity, and it can be a very confusing issue to navigate. The following document was prepared to assist Executive Directors/CEOs/Boards of Directors as they review their insurance needs and potential insurance providers. Focus on the Family offers this tool to help you become educated on the specifics about liability insurance and those who provide this product.

Introduction
There are six types of insurance that both medical and non-medical pregnancy resource centers (PRC) should seriously consider purchasing. These are:

  • General Liability
  • Professional (Medical Malpractice) Liability
  • Property
  • Directors and Officers Liability Including Employment Practices Liability
  • Worker's Compensation
  • Primary Auto Insurance for Owned, Hired and Non-Owned Autos

General Liability covers the non-professional risks of the PRC. Included in this coverage are client “slips and falls”, damage to the building due to the PRC's negligence (as in rented space), as well as injury of a non-professional manner to third parties. Note – consulting, sonograms and STD testing or treatments are risks not typically covered by General Liability.

Professional Liability covers those risks of a professional nature not covered by General Liability. This includes all risks peculiar to the clinic, including sonograms, STD testing (and possibly treatment), administration of prescriptions, etc. (slips and falls even in the clinic would continue to be covered by General Liability). This coverage also covers counseling.

Property coverage is generally comprised of three distinct parts, described below as A, B and C. All PRCs need A, a few may also need B, and those that own a building or rent an entire building may also need C.

Coverage A – This coverage is for “contents” or “personal” property. An example would be those things that are in your Center – computers, furniture, ultrasound machines, etc.

Coverage B – This is “transportation” coverage. An example would be personal property transported from one location to another. If a PRC were simply transporting a computer, most centers would not purchase this coverage, as it can be expensive. However, if a PRC is moving an ultrasound machine to various locations for demonstration purposes or for use in different locations, this coverage should be considered (when using an ultrasound machine at a banquet, one-time coverage is available for a nominal fee).

Coverage C – Building coverage is needed by those PRCs that own their own building. For those who rent or lease, they should acquire appropriate tenant coverage.

Directors and Officers covers independent directors, or board members, and the Executive Director/CEO as an officer of the PRC, from outside lawsuits of various kinds. Ask your insurance carrier for details as policies vary greatly from one insurer to another.

Worker's Compensation covers on-the-job injuries to PRC employees and volunteers. Most states require PRCs to purchase this coverage.

Auto Insurance for Owned Autos: All vehicles owned by the PRC should be insured at minimum for liability, medical payments and uninsured or underinsured motorist liability. Older vehicles may not warrant carrying physical damage coverage due to the value of the vehicle and the cost associated with purchasing comprehensive and collision coverage.

Hired and Non-owned Auto coverage replaces or augments the liability coverage offered by rental agencies. Non-owned coverage protects your company in the event that it is sued due to an accident involving an employee using their personal vehicle or a rental vehicle for company business. This coverage can be added by endorsement on a General Liability policy or written as a separate policy.

Since General Liability and Professional Liability policies work together to cover various risks within the PRC, it is recommended that they be purchased from the same insurance carrier at the same time. Professional Liability policies should be tailored to the PRC's needs.

Virtually all Professional Liability policies cover counseling, sonograms (check to see if your insurer will cover sonograms during all three trimesters), STD testing (see note under Professional Liability), and prescription dispensing (but often not prescribing). Check with your insurer to confirm all clinic exposures are covered.

Coverage for laminaria removal, etc. should be available, but it should not be purchased if the PRC does not have this type of exposure. The policies covering these risks are more expensive than is generally necessary for the typical PRC. Additional coverages may be purchased separately.

Asking Good Questions

Below are some questions PRCs should answer before purchasing insurance. Each PRC should ask prospective insurance providers for answers to any question that is important to the organization. (The order of the questions does not imply importance.)

General Coverage Questions

  1. Insurance is a very comparable industry. How do comparable rates and coverages compare?
  2. Is your insurance carrier prompt and thorough in returning calls and providing insurance policies? (If not, should this be a consideration in how they may handle future claims?)
  3. Will you receive a copy of the policies purchased?
  4. Following your insurance purchase, when will you receive your policies?
  5. Can you access your claims information on-line?
  6. States provide a “guaranty fund” to pay claims in the event the carrier becomes insolvent and cannot pay your claim. Not all carriers are covered by the guaranty fund. Is your carrier covered by a guarantee fund?
  7. Has your insurance carrier refused to pay claims that you have researched and determined to be legitimate? (If so, do you know your recourse options?)
  8. Deductibles must be paid by your center before insurance benefits apply. Are any policies available without deductibles? If so, how do the policies' coverages and costs compare? (See #2 on “Notes”)
  9. Insurance carriers are rated by independent rating agencies. A.M. Best is the most well known rating agency. Insurers are rated as to size (”I” is smallest and “XV” is largest) and stability (“NR” or “Not Rated” is lowest and “A+” is highest). What is the A.M. Best rating of your insurer? Note: Since insurance is a promise to pay a future claim, it is important that your carrier be at least average sized.

Specific Coverage Questions 

  1. Does the Property policy provide coverage based upon replacement cost? Does a coinsurance penalty apply to the coverage?
  2. Is the PRC covered for doctors and nurses? Is there an additional charge to add a doctor? If so, what is the additional charge?
  3. If needed, can you purchase General and/or Professional Liability limits greater than $1,000,000? If so, what is the additional charge?
  4. Are lawsuits alleging discrimination, wrongful termination, etc. covered? If so, what is the cost and exactly what is covered?

Notes:

  • Make certain you understand what is specifically covered and excluded within each policy.  This can make a big difference in premium costs, as well as in the event of a claim.
  • In considering deductibles, it is important to consider how much your center can afford in the event of a loss as compared to the cost/benefit of lowering the deductibles.
  • Is it important that your insurance provider have claims service available 24-hours-a-day, 7-days-a-week?
  • It is important that you know how long you should keep copies of all insurance policies.
  • Does your insurance agent carry professional liability to protect against possible errors & omissions?
  • In the worst-case event of a lawsuit against your PRC, how would your legal representation be determined?  It is important to know the criteria specified by your insurance carrier.

     

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