Why health care entities purchase
directors and officers liability coverage
By Cincinnati Management Liability & Surety
D&O liability coverage helps protect health care entities and their managers.
Health care organizations are under constant pressure in today’s world of evolving practices, procedures and laws. Managers deal with everything from the investment and allocation of corporate resources to administrative duties. The decisions they make affect everyone who has a relationship with the health care entity.
It’s a huge responsibility. Every action has the potential to put the organization and its individual managers and directors at risk for financial or reputational loss. But directors and officers liability insurance for health care entities – D&O coverage – can help these institutions recover from claims made against the organization and its managers.
In addition to all the issues faced by any business, health care managers must oversee and direct issues unique to health care facilities, such as peer review committees, quality of care and staff privileges. Health care facilities want to hire and retain top talent in the industry to oversee and run their organizations, but need to protect them from having personal liability at stake. D&O coverage helps accomplish that goal.
Consider some potential risks:
•written demands for monetary damages or nonmonetary relief
•formal administrative actions
Allegations can be brought by shareholders, patients, regulatory agencies, competitors, creditors or suppliers stating that the health care employees violated their professional duties of loyalty, obedience or due diligence. And those allegations or lawsuits could involve those employees’ spouses, heirs and estates.
Directors and officers coverage can insure:
•the health care institution and its subsidiaries
•past and present directors, officers, trustees, administrators, employees, faculty members, staff members, volunteers, members of boards or committees (including peer review committee members)
•spouses brought into a lawsuit because of shared property interest or transferred property
•estates, heirs, legal representatives or assigns of deceased, incapacitated or bankrupt insured persons
In summary, D&O coverage protects both health care professionals and the organizations they serve. It gives professionals the peace of mind to fulfill their roles within industry operating guidelines while preserving the organization’s ability to attract and hire top talent. Contact your local independent agent for more information about directors’ and officers’ liability coverage for your organization.
Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your independent agent.