“Sticks and stones may break my bones, but words will make me sue you!” Okay, this is definitely not the saying you may be used to hearing, but it makes for a great warning. What one says or writes can have significant repercussions, including ones that are financial!

This month we focus on a verbal attack that was so poorly received that it triggered a lawsuit. It appears that one party felt slandered (insulted) by statements made by another party in the course of a meeting of a hospital board.

Click below to see the different courts’ views on whether the endorsed policy obligated the insurer to respond to the claim.

Please click on the link to get more details on the court case.

The litigation we’ve focused on in this issue involved a professional liability policy issued to a medical practitioner. Normally an insured can rely on protection from legal obligations for harm to others under general liability policies. General liability coverage usually applies to bodily injury or property damage that a covered person causes to others or to property that belongs to others.

While covered incidents normally involve physical injury or damage, liability protection may also extend to certain losses that are not tangible. Beyond bodily injury and damage to property of others, protection exists for personal and advertising liability. Rather than physical loss, these respond to harm caused to another’s personal reputation or intellectual property rights.

Click here to see details concerning personal and advertising injury coverage and some exclusions. These are from the Commercial Lines Section of Gordis on Insurance, found in Advantage Plus.

Our featured dispute is over a liability exposure where a professional liability policy is asked to respond to the loss. For the moment, let us put aside the question over whether the policy should address the situation.

When considering professional liability protection, it’s important to determine the level of exposure. Professionals have a greater responsibility for their actions. Professional status is ascribed to persons who are experts in particular areas due to a high amount of education, training and experience such as doctors, lawyers, architects, engineers, psychologists, and other vocations. Other people place great reliance upon professionals. Therefore, they face a higher risk of being sued when their actions in their area of expertise result in harm.

Click here to see an excerpt of a tool that could assist in identifying which persons represent professional exposures. It is from Commercial Lines Risk Survey found in Advantage Plus.

Back to the case at hand, essentially a directors errors and omissions policy issued to a medical professional was modified by an endorsement that was intended to change the policy’s definition of “damages.” The primary policy was accompanied by an umbrella policy. The latter was provided by a different insurer. Confusion arose over whether the primary policy had an obligation to address a claim involving slander.

At the point of a serious claim’s submission, an insured is put in particular jeopardy when his protectors disagree on whether protection is owed. Endorsements should result in providing more clarity on coverage intent. This may be done either by expanding or limiting coverage. Often, added policy language results in the opposite, adding more ways for parties to interpret intent differently.

Insurance professionals are certainly in a position to avoid instances where added policy language muddies up how a claim might be handled.

Click here to see an article on the consequences of the inability to agree on policy terms. It is from the 01/19 edition of Rough Notes Magazine, found in Advantage Plus.