Summary: This article describes professional liability coverage for physicians, surgeons, and dentists. The ISO Physicians, Surgeons and Dentists Professional Liability coverage form (PR 00 01 09 08) affords protection against claims for injuries arising out of the insured's acts or omissions of a professional nature. Policies may be written to cover individual liability, partnerships, and professional associations and corporations.

Subject to conditions, definitions and exclusions which define the scope of coverage, the policy provides coverage A—individual professional liability and coverage B—partnership, limited liability company, association or corporation professional liability. Coverage A provides coverage for damages by a “medical incident” (a defined term) arising out of the practice of the insured's profession as a physician, surgeon or dentist. Coverage B provides coverage for damages by a “business entity incident” by a person for whose acts or omissions the partnership or association insured is legally responsible.

Topics covered:
Insuring agreements—Coverages A and B
Exclusions
Persons insured
Limits of insurance
Conditions
Definitions
Claims-made coverage
Other liability exposures

Insuring Agreements—Coverages A and B

1.Coverage A—Insuring Agreement—Individual Professional Liability

a.We will pay those sums that the insured becomes legally obligated to pay as damages because of injury to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for injury to which this insurance does not apply. We may at our discretion investigate any “medical incident” and settle any claim or “suit” that may result. But:

(1)The amount we will pay for damages is limited as described in Section III—Limits Of Insurance; and

(2)Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements.

No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments.

b.This insurance applies to injury only if:

(1)The injury is caused by a “medical incident” that takes place in the “coverage territory”;

(2)The injury occurs during the policy period; and

(3)The injury arises out of the individual insured's profession as a physician, surgeon, or dentist; and

(4)Prior to the policy period, no insured listed under Paragraph 1. of Section II – Who Is An Insured and no “employee” authorized by you to give or receive notice of a medical incident” or claim, knew that the injury occurred, then any continuation, change or resumption of such injury during or after the policy period will be deemed to have been known prior to the policy period.

c.Injury which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section II – Who Is An Insured or any “employee” authorized by you to give or receive notice of a “medical incident” or claim, includes any continuation, change or resumption of that injury after the end of the policy period.

d.Injury will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II — Who Is An Insured or any “employee” authorized by you to give or receive notice, of a “medical incident” or claim:

(1)Reports all, or any part, of the injury to us or any other insurer;

(2)Receives a written or verbal demand or claim for damages because of the injury; or

(3)Becomes aware by any other means that injury has occurred or has begun to occur.

2.Coverage B—Insuring Agreement Partnership, Limited Liability Company, Association, or Corporation Professional Liability

a.We will pay those sums that the insured becomes legally obligated to pay as damages because of injury to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for injury to which this insurance does not apply. We may at our discretion investigate any “business entity incident” and settle any claim or “suit” that may result. But:

(1)The amount we will pay for damages is limited as described in Section III—Limits Of Insurance; and

(2)Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements.

No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments.

b.This insurance applies to injury only if:

(1)The injury is caused by a “business entity incident” that takes place in the “coverage territory”;

(2)The injury occurs during the policy period; and

(3)The injury is caused by any person for whose acts or omissions the professional partnership, limited liability company, association, or corporation, named in the Declarations, is legally responsible.

(4)Prior to the policy period, no insured listed under Paragraph 2. of Section II — Who Is An Insured and no “employee” authorized by you to give or receive notice of a “business entity incident” or claim, knew that the injury had occurred, in whole or in part. If such a listed insured or authorized “employee” knew, prior to the policy period, that the injury occurred, then any continuation, change or resumption of such injury during or after the policy period will be deemed to have been prior to the policy period.

c.Injury which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section II – Who Is An Insured or any “employee” authorized by you to give or receive notice of a “business entity incident” or claim, includes any continuation, change or resumption of that injury after the end of the policy period.

d.Injury will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II — Who Is An Insured or any “employee” authorized by you to give or receive notice, of a “business entity incident” or claim:

(1)Reports all, or any part, of the injury to us or any other insurer;

(2)Receives a written or verbal demand or claim for damages because of the injury; or

(3)Becomes aware by any other means that injury has occurred or has begun to occur.

Analysis

The ISO physicians liability forms contain two insuring agreements, one for coverage A—individual professional liability, and one for coverage B—partnership, limited liability company, association, or corporation professional liability. It is essential to understand the different applications of these coverages when arranging coverage for a physician, surgeon, or dentist.

Coverage A insures the individual liability of each person named in the declarations as an insured. Hence, persons insured under coverage A may be a physician in practice alone or any number of physicians belonging to a partnership, association, or corporation. If an insured under coverage A is a partner or member of a medical partnership or association, he will not be insured under coverage A for his legal responsibility for fellow partners' malpractice. Likewise, if the individual is a shareholder of a professional corporation, the corporation will have no insurance under coverage A for malpractice of the individual. For either exposure, coverage B is required.

Coverage B applies to group liability. And, it is based on “business entity incidents” as opposed to the “medical incident” which governs coverage under part A of the insuring agreement. Both “business entity incident” and “medical incident” are defined terms and are discussed later in this article.

The insuring agreements on PR 00 01 give the insurer the right to settle any claim or suit against the insured without the consent of the insured.

Exclusions

PR 00 01 has some of the same exclusions as does PR 00 03 09 08, the hospital professional liability coverage form; for example, the workers comp exclusion, criminal acts exclusion, and the contractual liability exclusion. For information on those exclusions, see Hospital Professional Liability Insurance. This discussion centers on two exclusions that appear on PR 00 01 and do not appear on PR 00 03.