Deck 9: Professional Liability Insurance

Question 1

Several people sue a physician for medical professional liability over the course of 1 year, such that the limits of the policy are exceeded. What type of coverage may cover amounts over the limit of the regular policy?

A) Tail coverage
B) Occurrence
C) Claims made
D) Umbrella

Answer 1

D
An umbrella policy provides coverage beyond the amount limits of the basic policy. It may also provide coverage for events excluded from coverage under a basic policy.

Question 2

Which individual is probably an independent contractor?

A) A private nurse who sits with a patient just moved from intensive care
B) A registered nurse who works a weekend double shift only
C) A laboratory employee who works inside a hospital but is employed by an independent lab
D) A physician who visits his or her patients during rounds in a hospital

Answer 2

A
An independent contractor is a person who is self-employed and who enters contracts to provide professional services to various entities, such as hospitals, physicians' offices, or individual clients. A private nurse is not employed by a hospital and would therefore be an independent contractor.

Question 3

What is the best way to notify an insurer if a claim has been made against an insured person or facility?

A) Call and leave a message.
B) Send a letter by certified mail, return receipt requested.
C) Wait until a lawsuit is filed to do anything.
D) Send a letter by regular first-class mail.

Answer 3

B
The best method of notifying an insurer about a claim is to send written notification by certified mail, requesting a return receipt to prove that the insurer received the information.

Question 4

Generally, an insurance carrier will settle a lawsuit if the claimant has a ___% chance of winning at trial.

A) 25
B) 30
C) 40
D) 50

Question 5

Liability policies usually require annual payment of which of the following?

A) Installment
B) Sum
C) Premium
D) Deduction

Question 6

If a policy was in effect from January 1, 1995, through December 31, 2000, and a liability claim was filed on June 23, 2002, what type of coverage could cover the claim, if purchased?

A) Claims made
B) Tail coverage
C) Umbrella coverage
D) No coverage at all

Question 7

A policy was in effect from July 1, 1979, through August 31, 1995. A claim was made on the policy on October 24, 1998, related to an incident that happened while coverage was in force. Which type of policy is most likely to cover the claim?

A) Tail coverage
B) Claims made
C) Occurrence
D) Umbrella coverage

Question 8

Which statement regarding individual liability insurance policies is correct?

A) A personal liability policy is not necessary if the healthcare professional is employed in any capacity at a healthcare facility, because the facility's policy will cover his or her actions.
B) A person who does not own any property does not have anything to protect and therefore does not need a liability policy.
C) Independent contractors may require individual liability coverage even though he or she may be covered under a healthcare facility's policy.
D) An independent contractor would not be sued and therefore does not need liability coverage.

Question 9

What is the best reason to carry a personal professional liability policy?

A) It saves the physician money.
B) It ensures that the insurer maintains loyalty to its own insured.
C) It is inexpensive.
D) It is guaranteed payment of liability claims.

Question 10

Most physicians' offices carry a liability policy. Which would not be covered under the policy?

A) Physician
B) Medical assistant
C) Patient
D) Receptionist

Question 11

Liability insurers are interested in whether individuals or facilities have ever had which of the following filed against them?

A) Lawsuit
B) Malpractice
C) Negligence
D) Claim

Question 12

If an insurer pays a claim even though the physician contends that he or she was not at fault, the insurer may be exercising the right to:

A) contribution.
B) settlement.
C) indemnification.
D) defense.

Question 13

The prime objective of obtaining liability coverage is to:

A) avoid patient malpractice lawsuits.
B) protect assets in the event of a settlement in the claimant's favor.
C) avoid paying malpractice claims.
D) provide protection against high legal costs.

Question 14

Provisions in a policy usually allow an insurer to cancel or refuse to do which of the following with respect to the policy?

A) Pay for
B) File a claim against
C) Process
D) Renew

Question 15

The declarations page of a policy would not include which of the following items?

A) Details of coverage
B) Names of the persons or institutions covered
C) Period of time for which the policy is in effect
D) Amount of aggregate coverage

Question 16

Which of the following claims would probably be excluded from a professional liability policy?

A) Dispensing the wrong medication
B) Reporting incorrect lab results to a patient
C) Sexually assaulting a patient
D) Removing the wrong organ

Question 17

When there are disagreements about a claim-related accident, exclusions in an employer's liability policy can cause which of the following?

A) Loyalty
B) Conflict
C) Penalties
D) Resolution

Question 18

If the insurer determines that individuals not named in the claim played a role in the incident that led to the filing, the insurer may exercise the right of:

A) indemnification.
B) cancellation.
C) contribution.
D) nonrenewal.

Question 19

Which is not an advantage of a personal professional liability policy?

A) It is expensive.
B) It provides peace of mind.
C) It helps eliminate conflicts between employers and employees.
D) It may cover acts that the employer's policy does not cover.

Question 20

The declarations page usually describes which of the following aspects of liability?

A) Limits
B) Occurrence
C) Incident
D) Medical incident

Question 21

If you choose not to renew a policy as of June 30, and suit is brought against you on July 30 for an incident that occurred on June 30, you are not covered. This is considered what type of policy?

A) Tail coverage
B) Occurrence basis
C) Claims-made
D) Prior acts

Question 22

If you choose not to renew a policy as of June 30, and suit is brought against you on July 30 for an incident that occurred on June 30, you are covered. This is considered what type of policy?

A) Tail coverage
B) Occurrence basis
C) Claims-made
D) Prior acts

Question 23

Professional liability insurers may also provide additional coverage, including:

A) plaintiff expense benefit.
B) license protection.
C) professional liability.
D) professional injury protection.

Question 24

The key features to a private policy include all of the following, except:

A) protection.
B) disciplinary defense.
C) policy limits.
D) coverage.

Question 25

This type of policy covers incidents that occurred before the beginning effective date of the policy.

A) Tail coverage
B) Occurrence basis
C) Claims-made
D) Prior acts