The reasonable interpretation of language in an insurance policy dictates its coverage. Sometimes the definition of a word can cost a carrier or an insured millions, if not billions.

When the World Trade Towers were destroyed in a terrorist attack in 2001, there were a number of insurers who covered the risk for damage to the buildings. Their liability hinged on whether the damage was one event or two events. Was it one terrorist attack (one event)? Or was it two planes that hit two buildings (two events)? If the policy paid out a maximum amount per event, labeling the attack as two events would net the buildings’ owners more cash to rebuild. The courts interpreted some policies to have liability for two events; other policies one events. Language matters.

Now to the doctor. He’s a surgeon who performed a procedure that is considered “investigational” by his professional society. That said, the procedure is similar to established procedures for achieving the same outcome; and there are theoretical safety benefits for the new technique. Sorry about being coy with the details. But, the case is still pending. The procedure was done under Institutional Review Board (IRB) oversight so data could be gathered and a research paper published comparing safety and efficacy to procedures that have been around much longer.

The surgeon’s patient had an untoward outcome. Her family is suing the doctor for malpractice. The carrier supplied an attorney to defend. Now the carrier is suing the doctor reserving its right to avoid payment of any potential settlement or judgment. The surgeon had to hire his own attorney to ensure his interpretation of the policy is honored. It’s stressful enough being sued. But to be sued by a patient and then your carrier. That’s uber-stress.

Is the carrier right?

It depends upon the facts of the case. Many IRB sponsored trials seek data on new drugs and medical devices. There, the clinical trial has a corporate sponsor and that company is seeking regulatory approval from the FDA.  In such circumstances, there may be no data on safety or efficacy – or evolving data. So, a patient entering such a trial is not being offered the standard of care. He is being offered a chance to participate in pure research. The result may be excellent; may be death; or anything in between.

On the other end of the spectrum is the more common type of IRB trial. Research is conducted to compare established therapies. For example, in the latest New England Journal of Medicine, a study compared the use of statin alone versus statin plus Zetia in lowering LDL and frequency of cardiac events. According to the study, the combination therapy was more effective than single agent treatment. What happens if a patient died during THAT trial? If he sued his doctor for negligence, could his carrier avoid payment arguing the trial was investigational and conducted under auspices of IRB? Doubtful.

What to do?

If you are truly working with a corporate sponsor doing an IRB approved trial, ask that sponsor to indemnify you for any bad outcome associated with the trial. This will fill in any perceived gaps. Also, notify your carrier of the clinical trial. If they say they’ll cover you, great. If not, then you at least know where you stand. Some carriers may allow you to purchase riders. Some carriers provide standalone IRB sponsored research coverage. The more your medical malpractice carrier knows in advance of the work you intend to do, the more likely you will be covered should the feces hit the fan. Your carrier may want more information; and you may need to make the case that your work is more like the Zetia/statin clinical trial than an entirely new drug trial.

Understanding what a policy covers and doesn’t cover can cost you serious cash. Most risks can be covered by some policy or some rider. Just make sure you’re covered.

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