by Paula Burns, CIC, CRM, Insurance One Agency, LLC

Knowing what kind of insurance your Pregnancy Help Organization may need can be difficult. Beyond the general questions of what should be covered, each state has specific mandates or benefits about certain types of insurance. We sat down with Paula Burns from Insurance One Agency to find out what they would recommend.

Pregnancy Help Organizations (PHOs) are on the front line in the battle to save human lives and souls. They are the ultimate picture of the “Great Commission” coming to fruition and want every ministry dollar to go into the purpose and mission of the ministry, not into liability litigation. As a result, there are many questions frequently proposed regarding insurance for the centers and the wide scope of risk associated with them. This article includes a brief overview of insurance coverage a PHO should carry in their insurance coverage portfolio and addresses some of the most frequently asked questions.

Q: What is a general overview of insurance coverage a Pregnancy Help Organization (PHO) should carry?

A: Pregnancy Help Organizations should in general have the following in their insurance coverage portfolio:

• Package Policy which includes:
  • Property coverage- covers contents, outdoor signs, computers & equipment, buildings, or if rented location can include rental space betterments and improvements. Business Income/Extra Expense are normally included to cover loss of income and extra expense to run the PHO should the organization be shut down for a period of time due to a covered claim, and resulting expenses if they have to relocate.
  • General liability coverage- premises liability, personal injury, advertising injury, and general liability for your day to day operations of running the PHO that are not professional in the scope of duties. Volunteers normally are included in this coverage as insured’s. (Very important that volunteers are included in the definition of “Who is an Insured” on the PHC General Liability coverage portion of the policy.)
  • Medical Payments –This coverage is very important in that it is a “no fault” coverage that will protect the PHC from minor slip and fall claims/incidents that result from NO negligence on behalf of the PHC.
  • Crime- covers employee theft, forgery, theft or burglary of money and securities.
  • Inland Marine – Specialty equipment scheduled here. Sonograms are one example of property commonly scheduled on an inland marine form. Mobile sonograms would be part of an inland marine form, but stationary sonograms are normally included in contents coverage.
  • Sexual Misconduct Coverage – Be sure this is included in the coverage to protect not only the Sonographers, but the Client Advocates as well. This coverage is important to protect staff and volunteers from false allegations. Insurance One has many resources to assist with training to reduce this risk.
  • Professional Liability Coverage- Many policies will cover the Professional Liability exposure for your Medical Director, Nurse, Sonographer, Executive Director,& Client Advocates. Be sure that this coverage includes vicarious liability. This topic is covered later in the article in further detail. Every insurer’s forms are different regarding Professional Liability; be sure to ask if the above Professionals are covered.

•  Directors & Officers Including Employment Practices Coverage:
  • Directors & Officers coverage will extend to the individual Directors and Officers of the organization and protect them from errors or omissions in their governance of the organization. This is a very important portion of the coverage portfolio. There is a general misconception that the Directors and Officers are covered under the General Liability policy, but they are actually excluded on that policy, therefore leaving a huge exposure for the organization and Directors individually.

• Employment Practices Coverage* in general will extend to cover the following claims of:
  • Wrongful termination / breach of employment contract
  • Wrongful failure to promote
  • Violation of employment discrimination laws (including harassment)
  • Sexual harassment
  • Employment related retaliation/ humiliation
  • Employment Related wrongful discipline
  • Negligent employee evaluation
  • Wrongful demotion/ Negligent reassignment

*Note: The insurance carriers are seeing a large number of claims resulting from Employment Practices. It is key to be sure your PHO is carrying this coverage.

• Automobile Coverage
  • Even if the PHO does not own an auto they have two additional exposures:
    • Covers autos owned by the PHO
    • Hired Auto – when someone from the organization rents a vehicle this coverage will extend and cover the liability portion of the coverage for the car rental. This does not include damage to the rental car itself so it is always a best practice to purchase the Physical Damage coverage (also called the LDW – Loss Damage Waiver) from the rental car company directly.
    • Non-Owned Auto* – extends to cover the organization’s defense costs should a staff member or volunteer drive their own personal vehicle on behalf of the PHO.

*Note the employee or volunteer’s vehicle insurance is ALWAYS primary if they are driving their own vehicle on PHO business.

• Umbrella Coverage
  • Additional layer of coverage normally carried in increments of $1,000,000 that extends additional coverage for liability driven claims, normally for the following:
    • General Liability
    • Professional Liability
    • Employer’s Liability
    • Automobile Liability
    • Sometimes this is also extended to include Sexual Misconduct Liability

• Worker’s Compensation Coverage
  • Wikipedia’s definition is excellent and defines this coverage as follows; “Workers' compensation as a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.”
  • Every state’s laws vary regarding Worker’s Compensation. Some will mandate that Worker’s Compensation is carried by every employer with a certain number of employees. Texas, for example, does not mandate that employers have to carry Worker’s Compensation, however; the employer loses certain common law defenses if they do not subscribe to Worker’s Compensation. Be sure you understand the laws in your state and how it applies to your PHO operations.

Q: Should a PHO carry Worker’s Compensation Coverage? Will a PHO staff member’s personal health insurance coverage cover them if they are injured on the job?

A: As discussed in the section above, state law is going to mandate whether a PHO is required to carry Worker’s Compensation. If the state is not mandating that the PHO carry this coverage there are multiple considerations:

• First of all, an individual’s personal health insurance normally excludes work related injuries. That personal health insurance will cover employees injured on the job is a huge misconception with many organizations. They think because the individuals they have on staff carry health insurance that they do not need to carry Worker’s Compensation coverage. Nothing could be farther from the truth.
• Another common misconception is that this coverage is expensive. In fact, Worker’s Compensation is one of the cheapest coverages you can purchase in your entire coverage portfolio and it is a huge benefit to the employees. PHOs do not want to put their employees in the position of not having coverage should they be injured on the job. This could result in litigation against the PHO if there are medical bills that cannot be paid, loss of wages, and potentially even an injury that could result in the inability to continue working.
• Many states will give additional defenses if the organization subscribes to Worker’s Compensation. In Texas, for example, the organization gains the common law defense of assumed risk. Assumed risk is a hazard assumed to be part of the job duty. For example, if the organization hires an employee to take care of the yard maintenance, it is assumed that they might get something in their eye from the mowing of the lawn or some other type of hazard related to yard work, etc. The employee then could not sue the employer because they had this type of injury.

Be sure to check your state laws regarding Worker’s Compensation!

Q: Will a physician’s insurance automatically cover the pregnancy center?

A: No, the physician’s insurance may not extend on a volunteer basis. Professional liability policies are not standardized and therefore, literally every insurance carrier’s forms are different. Please ask this question up front and find out if the physician’s coverage will extend. Even if their coverage extends it normally is only going to cover them individually, it does not normally extend to cover the PHO and release them from claims of vicarious liability. The PHO needs to do some due diligence to reduce their risk regarding this exposure and some recommendations are as follows:

• Always make sure that you have on file a copy of the doctor’s license and that it is up to date and current.
• Keep a copy of the doctor’s Certificate of Insurance on file and update it on an annual basis at renewal.
• Verify if their coverage extends on a volunteer basis.
• It is important that the PHO consult with an insurance agent who understands this exposure and can design a coverage portfolio to pick up the doctor while they are acting in the capacity of Medical Director for the PHO. Some coverage forms will extend to the doctor if they are formally named the Medical Director. This is literally the coverage trigger in the policy. Your insurance advisor can walk you through this and be sure that your coverage gaps are filled.
• Be sure that your coverage includes vicarious liability. This is otherwise known as “guilty by association.” Be sure when you are referring clients to doctors or counselors that you give them a list as this will reduce your risk greatly. A claims example: The PHO refers a client to a specific doctor and there is a misdiagnosis resulting in some type of claim/loss. The PHO can be vicariously liable for this claim.
• The best case scenario is for the doctor’s coverage to extend on a volunteer basis and also include them in the PHOs coverage as well so all gaps are filled in the event of a claim.

In conclusion, the PHOs are operating in one of the most litigious environments to date and need to understand how to take a proactive stance towards risk. One component of a good risk management plan is insurance, however, insurance should never be substituted for risk management. It is important that every PHC have a good comprehensive training program in place for their staff and volunteers. This is the first line of defense against liability claims and is for their protection as well as the PHO.

Matthew 28:19-20 “Therefore go and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit, ²⁰ and teaching them to obey everything I have commanded you. And surely I am with you always, to the very end of the age.”

Paula Burns specializes in insuring larger churches and non-profit organizations and has been in the insurance industry for 29 years. She has earned the designations of Certified Insurance Counselor (CIC) and Certified Risk Manager (CRM). Her career began in property and casualty claims laying a foundation for Paula to be an advocate for clients when they need her the most, during a claim or crisis.

Paula is a faculty member of The National Alliance and teaches classes to other insurance professionals, risk managers, and non-profit organizations regarding risk management. When she is not teaching, or at the agency, you can find her on her horse farm close to Whitney, TX with her husband of 23 years. She and her husband Gary have two children, Brandon and Lindsey. She joined Insurance One Agency in 2010 because they have a heart to serve those who serve.

Insurance One has a national program that includes state of the art coverage designed specifically for Pregnancy Help Centers and many Heartbeat International and Care Net affiliates use this coverage. They understand the risks associated with insuring PHC's and partner with centers from all over the nation to protect their ministries. You can reach Insurance One Agency by clicking here.