The Personal Always Comes to the Light: How Off-Duty Actions Affect Medical Professional’s Insurability

Healthcare providers are often surprised to learn that their off-duty actions have real implications in terms of their medical malpractice insurability. Med mal insurance companies take a holistic approach to underwriting, analyzing the provider’s risk from many perspectives. And this includes what the provider chooses to do outside the walls of their practice. From recreational drug use to their online presence to personal lawsuits, providers should come to expect anything that can be found will be used in an Underwriter’s analysis to determine desirability as a potential insured.

In addition to the application provided to an insurance carrier, a quality Underwriter will use their research skills to learn as much about a provider as possible prior to setting pricing and providing terms – or deciding to decline outright. This includes Googling a provider’s name, employing AI tools to search databases and proprietary software, reading online reviews, uncovering personal lawsuits, and scouring social medica profiles.

What many healthcare providers tend to overlook is the purpose of Underwriting and insurance from the company’s perspective. An Underwriter’s job is to protect the assets of the company. They are employed to be the company’s first line of defense. And putting a set of limits (think $1,000,000/$3,000,000 in California or $500,000/$1,500,000 in Pennsylvania as a standard, for example) behind a healthcare provider is a gamble. The insurance company is putting money on the line hoping that the provider will deliver quality care and luck will be on their side, so they remain a profitable insured. If they don’t get sued and continue to pay their premium, they are a quality client. If they are a frequent flier in terms of claims or personal issues, they are likely to become a negative line item. So, it is in the best interest of the detective Underwriters to know as much about them as possible prior to deciding if they’re worth the bet.

Let’s explore a few hypotheticals and the implicit messaging received by Underwriters in each scenario.

• An MD had a consensual relationship with another single adult. The breakup goes poorly, and the physician takes to social media to rant about their former romantic partner. The MD tags them in multiple posts, shares intimate details, and calls them obscene names. The Underwriter uncovers the posts. The messaging here is that the physician lacks emotional regulation and overshares in inappropriate settings. The implication: beware, the MD may not make a good defendant on the stand. They may be prone to emotional outbursts, unable to accurately stick to and describe facts, and be a challenge for legal counsel and claims representatives to direct. They may come off as unstable or unprofessional to a jury, and the insurance company may be forced to settle claims that could’ve been successfully defended otherwise.
• An NP gets a DUI when driving on their day off. The police report indicates that the nurse practitioner was under the influence of alcohol and prescription pills while operating the vehicle. Aside from the obvious red flag that the NP may have substance abuse issues, the other important message here is: beware, they are an undue risk taker. The NP has demonstrated that they disregard rules and put others are risk, and this may translate to poor patient care. They may act recklessly and sidestep important safety procedures and treatment protocols. As a result, the nurse practitioner may be more likely to be sued due to undesirable patient outcomes and breaches to standard of care may be easily demonstratable.
• A DO has had multiple personal lawsuits over the past three years related to unpaid debts. Aside from the obvious that the physician may not be able to pay their insurance premium, the implication here is that the physician has questionable judgement. Beware: they have a history of making reckless choices and appearing irresponsible. They have shown that they don’t handle their obligations with care, and this can translate to poor patient treatment as well. They may also be distracted and unable to focus on both the clinical setting and the personal issues clearly overwhelming them. A further possibility is that this provider may feel pressured to make poor patient population decisions when faced with a cash flow problem.

What can be perceived as innocuous or irrelevant by the healthcare provider is taken seriously into consideration by Underwriting. Oftentimes, healthcare providers will try to flippantly explain away or deny how their personal endeavors should have no bearing on them as insureds. Or they’ll dig in too hard by trying to relitigate past experiences, attempting to convince the Underwriter that they are the true victim in the situation. This is where a broker steps in. A broker’s role is to explain how personal behavior affects malpractice insurance to the client. They are also here to share the story of the healthcare provider to the insurance company in a way that truthfully and accurately provides comfort to the skeptical Underwriter.

Being forthcoming is the healthcare provider’s greatest chance of success, but this can be a challenge for many clients. A broker must serve as a coach, explaining to the provider why their off-duty actions matter, why they should be forthcoming about the events, and outlining what the insurance company expects to see as a result. This can be especially hard when the matter is deeply personal to the provider. A broker must grow accustomed to having difficult conversations with healthcare providers who are defensive or deeply embarrassed. A good broker must be empathetic yet firm. They cannot let a provider dominate the conversation with endless storytelling. But they also must recognize that a provider is talking about some of their most sensitive experiences.

One successful tactic here is to emphasize to the provider that everyone else is viewing medical malpractice insurability as a pure business decision. The provider is fueled by personal feelings but everyone else at the table is analyzing risk and premium using numbers and facts. So stressing ideas of fairness or what’s morally right from the insured’s perspective has no bearing on whether a healthcare provider is a good risk from the company’s vantage point. Explaining this to the provider can help move them from hyper fixating on their personal stance to shifting into more rational and objective thinking.

A broker’s strongest tool is educating a provider on how to produce a thoughtfully crafted written statement to supplement any disclosures on the provider’s application. An Underwriter wants to be assured that a provider is being honest about previous misdeeds, understands why it’s impactful, and what actions they’ve taken to ensure it won’t happen again. The key here is to be contrite, acknowledge personal responsibility, and outline steps taken to demonstrate lessons learned. Shorter and direct is usually best. Present the facts only and eliminate any indications of overly emotional language. For a provider, clearly show where you were at fault and explain the direct impact the events had on your professional and personal development.

Selling a provider to an insurance company can be a delicate dance for a broker. The broker represents the healthcare provider and is incentivized to win the business. However, a broker’s relationship with their Underwriters and carriers is sacred. Without access to reputable markets and a strong rapport built on trust with their Underwriters, brokers have no chance of placing business. It is never in the broker’s best interest to burn a bridge with an Underwriter to get over on a single account.

Underwriters will remember if they were lied to or misled and will view the broker with the same level of skepticism they apply to their applicants going forward. If the Underwriter’s Spidey senses are tingling when your submission crosses their desk no matter how clean the applicant is, you have failed as a broker to build and maintain trust. A broker needs to be a strong advocate for their client, using tools of persuasion to gently push an Underwriter partner into providing or improving terms. But this should never be at the expense of the overall carrier/broker relationship. Maintaining integrity and good faith with the Underwriter is of upmost importance.

The condensed toolkit for a broker is as follows in dealing with insurability challenges for healthcare professionals:

1. Educate them on how personal behavior affects malpractice insurance insurability. Emphasize that the issue will be uncovered by Underwriting, so it’s best to own up now and help shape the narrative rather than attempt to cover it up.

2. Share the company’s perspective to move the provider away from being overly emotional.

• “This is Vegas, and the company is placing their bet on you. You are not a desirable bet right now for the following reasons…”
• “The insurance company is viewing this purely as a business decision. You need to operate from that same place. I understand that this is deeply personal and has had a profound effect on your life, but considerations of fairness and equity have no place in this discussion.”

3. Encourage them to be forthcoming in their application and share a short, thoughtfully written statement speaking about their accountability and lessons learned.

And as a broker, always nurture your relationship with your Underwriters and carriers. Trust is hard to gain but can easily be broken. Advocate for your provider but never at the expense of operating with integrity with your insurance company partners.

Meet the Author

Hannah Karson, MBA has been a medical malpractice insurance broker with L&J Insurance Services, Inc. for a decade and proudly became a co-owner of the brokerage in 2023. L&J is a boutique independent insurance brokerage that has specialized in hard-to-place medical malpractice insurance for individual providers and small groups for over 40 years. Hannah focuses on creating one-of-a-kind medical malpractice insurance policies for unique providers and risks. She especially enjoys working with healthcare providers who appreciate a more in-depth analysis of coverage options and the med mal marketplace, and she excels at putting those at ease who are nervous about their potential insurability. Hannah holds a BA from the University of California, Berkeley, and an MBA from the University of Oregon. She is licensed in over a dozen states and holds multiple RPLU certificates.