FOURTH QUARTER 2013 | ISSUE 1
Kevin Poole
Client Services Director,
Kane (Cayman) Limited
T: +1 345 914-2265
E: [email protected]
Linda Haddleton
Managing Director,
Kane (Cayman) Limited
T: +1 345 914-2261
E: [email protected]
new liabilities emerging from changes in the delivery of
healthcare. An important benefit for a captive owner is the
freedom to design insurance coverage, either to fill a gap in
commercial coverage, or to prepare for risks currently seen
as remote or not fully understood.
Co-ordinated healthcare as envisaged by PPACA will
present liability risks above and beyond today’s professional
liability risks. The increased population of insured people
with access to healthcare will present a demand versus
supply challenge, particularly in view of current concerns
about primary care physician numbers. The entire delivery
system will need to be reformed, which will require IT
investment to facilitate data-sharing, communication and
documentation. New roles may be created for persons with
oversight of medical cases. There may be greater utilisation
of non-medical practitioners.
To comply with the HIPAA Privacy Rule, health care
providers have adopted data security practices and policies.
The strength of these practices varies by provider. Coordinated health care requires sharing of medical and
other data across a network of providers. This presents
new liability exposures. First a provider must determine
what legally may be shared, and build a process with
safeguards around that. Secondly, a provider must protect
itself from a data breach that is not under its direct control.
Both present potential for liability. The provider needs to
determine whether their current D&O liability insurance
and cyber liability insurance will adequately protect them in
this environment of data sharing. Cyber liability insurance,
which typically covers notification expenses and legal fees,
is available in the commercial market, but may exclude data
breaches caused by a provider’s network “partner”, or have
insufficient limits to cover the magnitude of the data breach.
Risk managers will be looking not only for insurance
solutions but at risk management solutions. Depending
on a provider’s ability to negotiate affordable insurance,
there may well be a role for their captive in meeting
these challenges.
For these reasons, we are seeing captive boards consider
extending coverage beyond medical professional liability
to liabilities arising from the risks of delivery/co-ordination
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