Policyholder Services

What does Errors & Omissions insurance cover?

Errors and Omissions coverage protects the organization as well as employees, committee members, and medical directors against alleged errors, omissions, and breach of duties made in managed health care administration.

Although OMIC does not provide this type of insurance directly, we have arranged for access to this coverage through Lloyds of London underwriters.

Who is covered?
Ophthalmic business entities and their present or former executive officers, directors, trustees or governors, medical directors, and employees acting within the scope of their duties are covered under this policy.

What claims are covered?
OMIC will pay on behalf of the Insured losses due to claims based on alleged wrongful acts committed by or on behalf of the Insured in the rendering of or failure to render professional managed care services. The policy also covers claims based on alleged injuries due to a wrongful act committed by an independent contractor or other non-employed health care professional for whose conduct the organization is responsible.

What losses are covered?
The policy covers claim expenses, damages and additional benefits (e.g., interest, bonds, Insured’s costs) within policy limits. The policy does not cover multiplication of damages; taxes, fines or penalties; return of funds wrongfully withheld for services rendered and capitation payments; payments under any insurance contract; or monies due under any contract with a health care provider.

What prior acts are covered?
The policy covers claims made and reported after inception based upon incidents unknown to the company that occurred any time before the policy effective date. However, Retroactive Dates may be applied.

What are the coverage limits?
Coverage is provided on a claims made and reported basis. Limits are available from $500,000 to $1,000,000 per claim and annual aggregate, with a $5,000 deductible per claim.

What are typical claims?

Example #1: The Medical Group has been granted authority to make decisions regarding utilization review, claims handling, case management, or other, which allows them to decide who will and will not receive certain treatments or benefits. A patient sues the Medical Group because the Medical Group denied the patient a certain treatment or benefit. The patient will claim that the organization made the decision for financial reasons and not in the best interest of the patient.

Example #2: Corporate Negligence may be alleged by a patient if the entity fails to properly credential a physician and there is an injury to the patient.

Example #3: A physician may be “deselected” from a network or group (the entity) – either kicked out or not allowed in – and will allege that either intentional or negligent actions were taken against that physician that were discriminatory and that antitrust laws were violated.

These questions and answers are for informational purposes only. They are not intended to be a modification of the terms and conditions of the OMIC/Academy-sponsored insurance policies. Various coverages may not be available in all states.

Contact the program representative, Dana Pollard Carulli, at NAS Insurance Services (877) 808-6277 (or dcarulli@nasinsurance.com) for information about the competitive pricing for the limits and coverage that are appropriate for your practice.