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 Managed Care Liability (D&O) is a large and growing exposure for healthcare organizations. Most organizations are unique in structure, but all require protection from new liability risks arising from the evolution of the Managed Care Industry.
Directors and can be held liable for all of their acts, errors and omissions. They can also be held liable for acts of company employees and other business activities in which they did not necessarily participate. Most important, they can be personally liable for legal fees and other expenses incurred in defending claims made against them.
Some areas of risk:
Vicarious liability for Medical Malpractice
Outside Board Activities
Setting up Policies and Procedures
Charges of anticompetitive acts
Shareholder suits
Anti-Trust Allegations
Like other forms of insurance, D&O insurance is a method of transferring financial risk from the corporation, and individual directors and officers, to an insurer. Beyond its function as a prudent business practice, many companies purchase D&O to attract and retain outside directors.
It's better to evaluate your D&O coverage in the boardroom than in the courtroom.
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