Risk Management



Defending Claims, Selecting Counsel

By Kimberly Wittchow, JD  OMIC Staff Attorney

Digest, Spring 2006

Ophthalmologists inquiring about professional liability insurance often ask how OMIC selects defense counsel when a claim or lawsuit arises. They want to know which attorneys OMIC uses in their city, how OMIC chooses the attorneys it appoints, and if insureds can select their own counsel.

Selection of counsel is not specifically addressed in OMIC’s insurance policy. The policy does explain, however, that OMIC has the right and duty to defend each covered claim brought against the insured. In order to protect insureds against even frivolous claims, the policy requires that OMIC defend claims “even if wholly without merit.” The reciprocal duty of the insured is to immediately report the claim or any circumstances that might give rise to a claim. Without timely notice, OMIC may not be able to adequately exercise its right and fulfill its duty to defend the insured. OMIC must be involved from the beginning of the claim in order to actively participate in the insured’s defense. In the experience of OMIC’s Board and staff, if OMIC does not have control of the defense process from the earliest stages of litigation, its mission of effectively defending ophthalmologists is frustrated, which ultimately works to the detriment of the insured and the company as a whole.

Expert Defense of Ophthalmologists

Implicit within OMIC’s right and duty to defend each covered claim is the right to select and appoint defense counsel. Currently, OMIC has approximately 190 attorneys and law firms on its nationwide list of active counsel. These are the most qualified and consistently successful medical malpractice defense attorneys in the country. Most have worked on several OMIC cases and many are considered “subspecialists” in the defense of ophthalmologists. Given this large base of competent attorneys, assigning defense counsel has been a relatively smooth process in all of the claims OMIC has handled since its inception.

For their part, most OMIC insureds handle the stress of emotionally charged medical malpractice litigation very well and do not allow their anxiety to spill over and adversely impact the selection of counsel and defense of their claim. Mutual trust and a professional relationship between the insured ophthalmologist and his or her attorney are fundamental to a successful defense. OMIC carefully monitors this relationship throughout the course of litigation and surveys every insured after a claim is closed to get feedback about the insured’s experience with counsel.

On rare occasions, the fit between an insured and an attorney is not right. When this occurs, insureds are encouraged to make OMIC aware of any issues they are having with their counsel. Oftentimes, these issues are a natural consequence of the stress of litigation and frequently resolve themselves without OMIC intervening. However, in a few circumstances, OMIC has felt that an insured’s defense would be better served by a change of counsel and has appointed a different attorney.

The Need for Separate Counsel

There are some occasions during litigation when OMIC may have the duty to advise an insured to retain his or her own separate counsel. This happens when some of the allegations in the lawsuit are not covered by the OMIC policy or when the policy pays defense costs but not indemnity for certain allegations. Sometimes OMIC must advise the insured to retain separate counsel if the claim is likely to result in a judgment in excess of the insured’s policy limit or if the judgment may include non-covered sums, such as punitive or other exemplary damages. In many of these situations, the uninsured allegations are dismissed before there is a need to retain separate counsel. Unfortunately in other cases, the allegations remain and the insured must bear the cost of any separate legal defense.

In a handful of cases, OMIC has learned that the insured has engaged his or her own private counsel prior to reporting the claim to OMIC or without OMIC’s approval. Insureds have even tried to settle cases themselves without informing the company of the claim. In these situations, if the insured engages counsel directly without OMIC’s approval, the defense costs accrued will not be covered by OMIC. In addition, any indemnity payments made by the insured without OMIC’s approval also will not be covered by the company.

For more information on this subject, please see OMIC’s Litigation Handbook for the Ophthalmologist or the following articles, which can be found on the OMIC web site at www.omic.com:

• “Choosing Defense Counsel,” by Mary Kasher, MSN, JD, OMIC Digest, Winter 2001.

• “How to Survive a Malpractice Suit,” by Paul Weber, JD, Review of Ophthalmology, July 1997.

• “Anatomy of a Claim,” by Marilys Fernandez, RN, JD, OMIC Digest, Winter 1991.

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Six reasons OMIC is the best choice for ophthalmologists in America.

#1. Consistent return of premium.

Publicly-traded insurance companies exist to make profits for shareholders while physician-owned carriers often return profits to their policyholders. Don’t underestimate this benefit; it can add up to tens of thousands of dollars over the course of your career. OMIC has one of the most generous dividend programs for ophthalmologists and has returned more than $20 Million to our members through dividends.

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