“I have an initial meeting next week with a prospect who is a referral from a good client of mine. The company transports people to various medical facilities, such as routine doctor visits and other non-emergency appointments. Transportation risks are not my specialty, so I’m trying to get up to speed on some of the unique exposures I might encounter with this prospect. I’ve been to the company’s web site, so I already have a pretty good idea about the scope of their operation, their company history, etc. One issue I’m still pondering is the exposure arising from moving patients from the vehicle and into the medical facility. This seems to be a potential gray area between BAP and CGL, something of a ‘loading and unloading’ situation. Any thoughts?”
First, I applaud you for taking the time to do some background work prior to the initial meeting next week. Not every producer does that, so I think you’ve already got a head start over some of your competition. The coverage issue you’ve raised has two components to it, in my view. First, we need to review what coverage is provided (and not provided) by the standard, unendorsed BAP and CGL regarding transporting and assisting patients into and out of the vehicle. Then we can look at solutions, including endorsements, as well as how the marketplace handles these types of risks. By the way, this segment of the broad transportation market is called Non-Emergency Medical Transportation (NEMT), and is sometimes also referred to as “Para-Transport.” Those are terms your underwriters will recognize.
Unendorsed BAP. While the patient is being transported in the vehicle, they have the same coverage as would any other passenger, under the company’s BAP for liability, medical payments and uninsured motorist coverages. When it comes to helping the patient out of the vehicle and into the doctor’s office or other medical facility, here’s how I see these three coverages applying.
(1) Liability. Coverage applies as follows: “We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto". In general, this coverage probably won’t extend far beyond occupancy of the vehicle, in my view. I think there would have to be some clear and compelling nexus to the auto for the liability coverage to apply once the patient is out of the vehicle.
(2) Medical Payments. The BAP Medical Payments coverage (CA 99 03) covers anyone "occupying a covered auto…,” with "occupying" being defined as "...in, upon, getting in, on, out or off." How far that definition extends from the auto to the door of the doctor's office and beyond is debatable (and litigated). At the same time, Medical Payments limits would probably be insufficient for many of the injuries that might occur in these situations.
(3) Uninsured Motorists. UM coverage tracks Medical Payments coverage, and would apply to a patient “occupying” the company’s vehicle (see discussion above), if the injury was due to an uninsured motorist.
Unendorsed CGL. For the NEMT class of business, the CGL usually applies once the patient is outside of the auto. Here is how the CGL auto liability exclusion addresses this exposure:
This insurance does not apply to:
g. Aircraft, Auto Or Watercraft. "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".
[Note that in the Definitions section of the CGL, the phrase "loading or unloading" means the handling of property, not people.]
Endorsements and Markets. The unendorsed BAP and CGL automatically provide coverage for most of the patient-related exposures of a NEMT company, and you should place both the BAP and CGL with the same insurer. However, many insurers are reluctant to cover these special and often higher-risk exposures for injury to patients being transported and assisted in and out of vehicles. Therefore, most BAP and CGL markets will often attach some sort of “professional services” exclusion. Some markets will allow a buy-back, while others will not. In my experience, one of the key underwriting issues is whether or not there is a medically-certified professional in the vehicle, who also assists the patient in getting in and out of the vehicle. Where the exposure is beyond the underwriting guidelines of an insurer, you will need to approach some of the specialty markets for NEMT coverage.
Lastly, from the standpoint of being a professional, as well as prudent E&O loss control procedures, it would be wise to use a broad-based coverage checklist with this account. For example, in doing some research for your question, I found a number of NEMT services on the Internet that also operate routine non-medical transportation ventures, such as limousines, vans and so forth. Some are run by what appear to be sister-companies, and some seem to be part of the same company. In a few cases, they also operate air ambulance services, so it would be critically important to be sure you get a clear understanding of the entire scope of the company’s business operations. And as every E&O attorney will tell you, be sure to also have the insured sign the coverage checklist. Good luck – I hope you write the account!
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Last Updated: October 8, 2015