Sued At Work? Are You Covered?

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The saga of John Ritter's untimely passing continues in court this week. The family of the late actor, who suffered a torn aorta and died suddenly at age 54, is seeking $67 million from a cardiologist who treated the Three’s Company (DIS) star and a radiologist who performed a body scan on Ritter two years prior to his 2003 demise. This wrongful death lawsuit, which claims the doctors misdiagnosed his health condition, follows a roughly $14 million settlement with the hospital that admitted Ritter and eight medical personnel.

The doctors deny any wrongdoing, but no matter what the courts determine later this week, they both had to spend time and money in court defending their work. Accidents and mistakes can happen in any profession. If you get sued for your on-the-job performance, who would pay for your defense? Insurance experts say it depends.

“When professional liability coverage first started out it was limited to doctors, lawyers, accountants, architects, and engineers,” says John Sadler, president of Sadler & Company in Columbia, S.C. “more recently professional liability insurance has been provided to miscellaneous professionals.”


Sadler caters to the technology industry where businesses buy both professional liability policies and general liability policies to protect against potential lawsuits. General liability is for bodily injury, property damage, or slander and libel. A professional liability policy protects against negligence suits, such as when an individual is involved in an action that causes economic damages to a third party. “If a software programmer makes a mistake in his code and it results in the wrong amount being charged on an e-commerce transaction, causing the business owner to lose money, that is economic damage not related to bodily injury and property damage," says Sadler. Situations such as the one Sadler describes can cost from $5,000 to many millions to resolve. “But most disputes are settled prior to litigation.”


Every company's coverage plan is different. Read your employment contract to check on your employer's responsibilities regarding potential legal actions and the payment of related attorney fees, says Stephen P. Sonnenberg a lawyer at Paul Hastings who specializes in defending employment litigation. “It’s important to look to those contracts to see whether or not there are provisions that address indemnification," says Sonnenberg. But, if the employee is being sued for a workplace crime that is not related to performing their actual job, such as sexual harassment, "the employer does not have the responsibility to cover the employee regardless of a contract.”


If your employer does not extend their professional insurance coverage to you for a work-related lawsuit, individual insurance is another option. The minimum annual premium for professional liability insurance for an individual is $1,000, for coverage that would top off at $1 million per claim, says Sadler. Unions can also provide liability insurance for their members. But, no matter what, it is important to know where you stand in terms of coverage, just in case, says New York attorney Raoul Felder. “If you don’t have union protection then you have to resort to self help,” says Felder. “If your company doesn’t extend their policy coverage to you, then you need to buy insurance, otherwise you are at your own peril.”

 

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