One significant consequence of the pandemic lockdown was a dramatic increase in the demand for veterinary services due to rising pet purchases and adoptions, people working from home, and pet owners spending more time with their cats and dogs. At the same time, more patients, longer clinic hours, inadequate staffing and a traditional services model adversely affected professional liability, license defense and animal bailee exposures.
Most jurisdictions view pets as property, limiting a client’s monetary recovery to the animal’s fair-market replacement value. Still, pet owners frequently turn to veterinary licensing bodies for emotional relief and to civil litigation for financial restitution. Such actions exert pressure on a veterinarian’s reputation and ability to practice.
Another result of COVID-19 is the expanding delivery of telehealth and telemedicine services. Unfortunately, veterinary associations and state boards have not reached a consensus on what is acceptable. Likewise, there is no firm unanimity regarding telehealth and its impact on professional liability and license defense insurance. Let’s explore.
Professional Liability Insurance
The good news is that liability insurance that protects and defends against allegations of professional wrongdoing (negligence) in the delivery of veterinary services remains readily available and very reasonably priced.
Here are three basic professional liability policies:
- Individual: A single veterinarian is the named insured.
- Group: The business entity is the named insured. The policy typically covers the practice and all veterinarians and staff members, regardless of whether they are full time, part time or relief. No individual policies are required. The policy is designed for large, multiple-location entities that employ many veterinarians.
- Business: It’s like a group policy except that professional liability, license defense and animal bailee coverages are incorporated into the overall commercial property and liability insurance policy.
Here’s what to look for:
- Adequate limits: For small animal veterinarians, a minimum $1 million per occurrence limit is good. Veterinarians working in herd management or with high-value animals should consider higher limits. Consult your attorney for specific recommendations.
- Telehealth: Confirm your policy’s stance on responding to claims related to virtual consulting and virtual medical services.
- Defense attorneys: Who does the insurer use for claims defense? You’ll want a nationally recognized veterinary civil litigation specialist.
- Consent to settle: Ensure that no claim is settled without your written permission or a court order. After all, your reputation is at risk.
- No hammer clause: Under such a clause, if you refuse a settlement negotiated by your insurance company, you might be financially responsible for all or most of the legal expenses and judgments above what the insurer proposed. Ensure that your policy does not have a hammer clause.
- Claims adjusters: Ask about the education and experience of claims specialists. Whenever possible, demand an adjuster who has a law degree and specializes in veterinary litigation.
- Expert witnesses: Confirm that the insurance company will hire experts on your behalf.
If you’re threatened with or served with a professional liability claim:
- Report it immediately to your insurance company.
- Report all potential claims arising from a disgruntled client or a poor therapeutic outcome. Inform the claims representative that the report is “for information purposes only.”
- Get confirmation from the insurer that no settlement will be made without your approval.
- Demonstrate concern and compassion for the client and pet when discussing miscommunication or a negative therapeutic outcome.
- Apologize, if appropriate, but do not admit overt guilt or wrongdoing to clients or their legal representatives until you have discussed the case with your insurer or attorney.
- Refer all questions from a client’s legal representative to your claims person or attorney.
- Do not agree to or infer an intent to settle with clients or their representatives.
- Do not speculate in the medical record on the cause of a patient’s death. Only state the known facts. A necropsy should be performed (by a veterinary pathologist, if possible) when the cause is unknown.
- Do not provide clients or their representatives with the original medical record, radiographs or miscellaneous supporting documents. However, do provide copies when requested. Consult your attorney for guidance.
License Defense Insurance
This type covers legal expenses incurred when you defend a complaint brought by a state licensing board. The coverage is part of the overall professional liability policy or is a separate endorsement. The key coverage features you’ll want include:
- Adequate limits: Several insurance companies offer up to $100,000 annually. The difference in premiums for lesser amounts is minimal. Consult an attorney if you’re unsure.
- Telehealth: Confirm your policy’s stance on responding to claims related to virtual consulting and virtual medical services.
- Defense attorneys: Make sure your insurance company hires attorneys who have handled cases with the state board. You’ll also want access to expert consultants.
When faced with a state board complaint, do this:
- Report it immediately to your insurance company.
- Do not respond without legal assistance.
- Ask your insurer to select an attorney in your state who specializes in veterinary licensing board complaints.
Animal Bailee Insurance
Animal bailee is a property coverage designed to protect veterinary practices if an animal is injured or killed while in their care, custody or control. It’s often subject to a deductible, whereas professional liability and license defense are not.
The basic types of animal bailee policies are:
- Individual: Typically offered as the third optional component after professional liability and license defense coverage.
- Group: See “Individual.”
- Business: The endorsement is incorporated into an overall commercial property and liability insurance policy. There’s no separate policy.
In which scenarios would animal bailee coverage respond? Here are a few:
- An animal’s escape. This risk is becoming more common as hospitals offer concierge services.
- An accident involving a motor vehicle or trailer.
- A fight between animals.
- A fire.
- A natural disaster.
- A problem involving a cage, corral or fenced-in area.
When discussing animal bailee coverage with your insurance agent, pay special attention to deductibles and coverage limitations. Some policies offer high annual coverage limits but severely restrict per-animal, in-transit, off-premises or total per-occurrence coverage.