Introduction
Medical malpractices and law suits in health care industry have become common. Doctors and nurses provided poor quality services to patients. For instance, the doctors do not ensure patient safety while providing heath care services. This in turn causes injuries to the patients. For instance, it causes injuries to the organs. In other cases it causes death and damages to the patient. Lack of patient safety has led to increase in the number of law suits in the country, hence the cost of malpractices. This has led to high demand for liability insurance. Liability insurance is aimed at providing cover and protection to different people in the country. Like other industries, liability insurance provides protection to parties in health care industry. For example, it provides cover for malpractices. Doctors and nurses are required to have liability insurance to cater for mal practices in the industry. The doctors and nurses use the cover to compensate patients for causing injuries and deaths. The doctors and nurses use the covers to pay for the cost of law suits. In addition, the insurance firms provide cover to parties who have entered into a contract. The companies defend the insured in the case. This paper analyzes liability insurance and relates it to health care laws.
Discussion
Liability insurance is part of general insurance system of risk financing that is aimed at protecting the purchaser or the person insured from the risks that result from liabilities from law suits. It also protects the insurer from other claims that are similar to risks of liabilities. Liability insurance protect the person insured incase the person is sued for claims that are associated with the coverage of the insurance policy. Before, companies and people who faced common peril formed an organization and created a self help fund out so as to compensate any member who incurred looses. The groups formed a mutual insurance arrangement. In the modern society, individuals and companies rely on carriers. The carriers protect people and the groups from problems that result from premium. Liability insurance is mainly made to offer protection to third party insurance claims. In this case, the payment is not made to the insurer, but to someone suffering looses. The person is not always a member of the insurance contract. Liability insurance does not cover damages carried out intentionally and contractual liability. When a complaint is raised, the insurance carrier is required to defend the person insured (Howels, 1991).
Liability insurance provides various things to the insurers. A liability insurer is supposed to defend and indemnify. The liability insurer is supposed to defend if the person insured is sued and then tenders defense of the claim to the person providing liability insurance. The insured is required to send a copy of the complaint together with a cover letter. The letter should show the relevant insurance policies and the demand for an immediate defense. The insurer has a right to refuse to defend the insurer. For example, the insurer can fail to provide a cover under the policy. This in turn forces the insurer to defend him. In addition, the insurer can defend unconditionally or under reservation rights. The insurer has a right to withdraw from defending the insured if the claim is not covered by the insurance policies. If the insurer decides to defend, he may defend the claim using his lawyers or outside lawyers (Howels, 1991).Moreover, the insurer has a duty to indemnify. In this case, the insurer is supposed to pay all the amount the person insured is held liable up to a certain limit set by the policy. Also, the insurer can settle a claim against the person insured so that the person insured is not affected by the judgment. If the insurer does not carry out his duties then, he is held liable for the tort of insurance bad faith and also breach of contract (Howels, 1991).
Most countries have established liability insurance. Liability insurance in most countries is a form of insurance for people who are at the risk of being sued by a third party for negligence (O’Leary, 2007). The insurance liability provides different covers to different group. For instance, liability insurance provides insurance cover to manufacturers and people who offer professional services to the public. It also provides insurance cover to people who manufacture products that might harm the users. It also covers people who offer employment. The different groups are provided with insurance cover because they involve in risk activities. For instance, the activities might cause looses and injuries. So, the groups have to get insurance covers so as to be able to cater for damages and looses if they happen. This makes it easy for the groups to compensate those who are affected (O’Leary, 2007).
There are different types of liability insurance. That is public liability, products, employer and insurable risks. Public liability is made to provide insurance to industries and commerce. Industries and business are based on a wide range of activities and processes that can affect third parties. The activities are capable of affecting the pubic and other people. For instance, the activities and processes can cause damage or injuries to the public. The public liability varies from one country to another. This depends on whether the countries have made public liability insurance mandatory or not. Most organizations have included insurance in their activities so as to cater for the damages. Employer liability insurance covers any liability an employer incurs in case an employee is injured during employment. The employer liability insurance is common in United States. The insurers are prohibited from incorporating conditions in their policies that impose unnecessary conditions to the liability. This is to ensure the insured is able to get the best. Liability insurance covers a wide range of risks. For example, liability insurance covers people sued for negligence and strict liability torts. On the other hand, liability insurance does not cover any crimes that are committed intentionally (Howels, 1991).
Liability insurance is related to health care law. Liability insurance plays an important role in the different areas. For instance, liability insurance helps protect the relation between the parties in health care industry who are governed by health care laws. Health law refers to federal, state and locallaws and rules and Jurisprudence that affect heath care industry. The health care laws apply to different people in the health care industry. For instance, the health care laws apply to health care patient, provider and payors. In addition, the health care laws apply to vendors in health care industry. There are different types of vendors in health care industry and they are governed by the heath care laws. Moreover, the health care laws govern different relationships in the health care industry.
For instance, the health care laws govern the relationship among providers, payors and vendors and patients in the health care industry. They also govern delivery of health care services in the industry (Connor, 2009). The health care laws govern operation, regulatory and transaction legal issues. There are different areas of health care laws. That is contract laws and medical malpractices. Other areas include administrative law and public heath law and consent. Liability insurance helps provide defense in contract law in health care. Contract laws govern contracts in health care industry. A contract is a legal agreement between two parties or more. A contract contains different elements that are found in legal agreements. A legal contract involves exchange of promises with specific legal remedies if a person breaches it. For instance, the contract can have compensation remedies. In this case the person is required to pay some money because of breaching a contract. The person pays the money that would have been exchanged.
Different people in health care industries enter into a contract. For example, doctors and patients enter into a contract. Also, health care insurance companies enter into a contract with a heath care providers. Insurance companies provide defense to the person insured. The person insured can ask the insurance company to provide defense if the claim is covered in the liability insurance cover. In this case the defense is only provided under certain circumstances. For instance, the defense is provided if the there was a mistake in the contract formation. In addition, the insurance company provides a defense if there was misinterpretation of the information in the contract. It also provides defense if there is duress in contract formation. The company providing defense should determine if the contract is void or not void. The person insured should provide a cover letter and a copy of the law suit to the insurance company. In other cases, the insurance company may fail to provide defense. In this case, the person insured is supposed to defend himself (Connor, 2009).
Another area in health care law is medical malpractices. Medical malpractice refers to a professional negligence by a health care provider by omission or act. In this case, the heath care provider does not abide by the standards that govern health care practices in the medical community. The health care provider in turn causes injury to the patient and death to the patients. There are heath care rules that govern medical malpractices, but they differ from one country to another. Heath care professionals are supposed to maintain professional liability insurance so as to cover the risks that occur when working. In addition, the medical professionals are supposed to maintain professional liability insurance to help them repay the cost of law suits that result from medical malpractices (Abraham, 2008).
Medical malpractices have become common in many countries. This has led to increase in the number of law suits resulting from medical malpractices. For example, the rate of medical malpractices in United States has increased greatly. This has in turn increased the cost of medical malpractices in the country. The cost of medical malpractices has increased by 12% per year for the last three decades. Most doctor, nurses, insurance companies and patients claim that the high cost of medical malpractices in the country have had negative effects. For instance, the high cost of medical malpractices has forced doctors to stop investing in the country (Abraham, 2008). The doctors have moved to other states that have good rules that govern malpractices. A report released in 2003 by the general accounting office indicated that the high cost of medical malpractices was mainly caused by increase in law suits. Insurance companies have started providing liability insurance to health care providers so as to reduce the burden.
The insurance companies provide liability insurance to cater for medical malpractices that result from negligence. The cover provides compensation to the health care providers for the risk caused like patient’s death and also injuries. In addition, the insurance companies provide liability insurance to the health professionals to cater for the cost of law suits in the country. The general liability insurance allows the insurance companies to pay for damages caused to the third party. In this case, the third party is the patient. The damages caused to the patient may include compensatory damages and punitive damages. Compensatory damages are economic and non economic damages. Economic damages consist of financial looses like loose of wages, medical expenses and life care expenses. Non economic damages result from injuries like physical and psychological injuries. The insurance company can compensate for loose of organs or limbs. Punitive damages are given when there is reckless conduct (Abraham, 2008).
Further, the product liability insurance is used to provide cover to the health providers who may use drugs that affect the patient. In this case the health care providers are supposed to be reliable for using the drugs or performing cosmetic surgery. The insurance companies will not provide liability insurance to doctors who cause injuries or death intentionally. The liability insurance helps provide public liability cover to vendors and payors in the heath care industry. The pubic liability is provided to industries that supply goods and services in the health care industry. This is because the companies deal with goods and services that can cause damage or injury to the third parties in the industry. For instance, the companies provide drugs and equipment that can affect patients in the industry. The public liability insurance helps the companies overcome the challenges resulting from their activities as they are able to cater for law suit costs and injuries (Abraham, 2008).
Conclusion
Liability insurance has helped provide cover for risks and damages that insured face. The insurance companies provide different types of liability insurance to clients. For instance, they provide public liability, product etc. They also provide insurance to insurance risks like negligence in health care industry. Liability insurance is related to health care laws as it provides cover for risks and damages that result from different health care laws. For example, it provides cover for medical malpractices and contract laws. Doctors, patients and nurses get liability insurance to protect them. Hence, this has helped overcome issues in the industry.
Reference
Abraham, K.S .(2008).The liability century: insurance and tort law from the Progressive Era to 9/11. HarvardUniversity Press
Connor, J.F. (2009).Employers’ Liability, Workmen’s Compensation and Liability Insurance.General Books LLC
Howels,G. G(1991).Product liability, insurance, and the pharmaceutical industry: an Anglo-American comparison. ManchesterUniversityPressND
O’Leary,M.(2007).Directors & officers liability insurance deskbook. PublisherAmerican Bar Association
