Expanding Risks, Challenging Markets: Five Healthcare Management Liability Priorities in 2021
Some healthcare entities — particularly nonprofit and private organizations — are seeing significantly higher pricing.
From growing employment practices risks to concerns over excessive fee settlements, healthcare senior leaders face another potentially difficult year addressing healthcare management liability risks and a challenging insurance marketplace. As the risk landscape expands, preparing for what lies ahead is vital.
Key Trends to Watch:
1. D&O challenges persist
In the US, primary directors and officers liability (D&O) pricing for healthcare organizations increased an average of 20.7% in the fourth quarter of 2020, while total program pricing increased 28.2% on average.
2. EPL risks expanding
Amid an unprecedented pandemic, the focus on the welfare and treatment of frontline workers has grown exponentially. Rising social inflation and a number of emerging trends are also driving up both the frequency and severity of employment practices liability (EPL) claims.
3. More regulatory scruitiny coming
Still in its early days, the Biden administration has made clear that healthcare is one of its priorities. In addition to reestablishing COVID-19 as a national emergency, the administration is also focusing on reallocating federal funding and creating a more robust health exchange experience under the Affordable Care Act.
4. Fiduciary market evolving
Healthcare organizations are seeing pricing in the fiduciary market grow at a quick pace as some notable excessive fee settlements in the last year have given underwriters pause.
5. Side A coverage in the spotlight
Elective procedures are expected to pick up again after the threat of COVID-19 is contained. Still, healthcare organizations may continue to experience strains on their profitability post-pandemic. This underscores the potential value in purchasing dedicated Side A coverage.
Protecting your organization in 2021
Planning and preparation are vital when readying your organization for potentially more difficult management liability insurance renewals in the year ahead. Starting early— at least 180 days before policy expiration — is crucial, especially for buyers that intend to market their programs.
Recommendations for risk professionals for individual lines of coverage:
- D&O buyers should involve senior leaders in negotiation processes and consider different approaches.
- Employers should be ready and willing to address EPL underwriters’ specific concerns.
- Fiduciary liability buyers should prepare for more questions from insurers.
Learn more about how these trends could impact your organization and the actions you can take to improve outcomes for your renewal.