Frequently Asked Questions
About Medical Professional Liability Insurance

NOTE: This document was prepared by the MSU Office of Risk Management and Insurance to provide general information about medical professional liability insurance. Specific coverage questions should be directed to Matthew McCabe, Director, at 355-5022 or Mccabem@ctlr.msu.edu.

What professional liability coverage does MSU provide to faculty/staff?

The medical professional liability insurance program supports the University’s indemnification policy, which states:

“Michigan State University will support its trustees, officers, faculty, and staff when acting in the performance of assigned duties on behalf of the University. This policy also applies to students while engaged in approved academic programs and volunteers who are performing services for the University with prior written approval of the appropriate University official. The University will defend, save harmless, and indemnify such persons against any suit or proceeding, wherever brought, premised upon the fact that he or she is or was a member of the Board or an officer, employee, student, or volunteer of the University. The indemnity extends to expenses including attorney fees, judgments, fines, and amounts paid in settlement, actually and reasonably incurred, and with respect to any criminal action or proceeding where such person had no reasonable cause to believe that his or her conduct was unlawful. As a condition of indemnification, the trustee, official, employee, student, or volunteer is required to cooperate fully on a continuous basis with the University Attorney and the Office of Insurance and Risk Management.”

The Board of Trustees approved the policy on March 15, 1974; it was revised on September 2, 1983. (The text can be found in the MSU Faculty Handbook)

Does this coverage extend to faculty with clinical appointments?

Yes. The issue is addressed in Academic Policies and Procedures.

The following excerpt is from the Faculty Handbook.

“The general principle of such coverage is that the University will participate with the physician and his/her own attorney and malpractice insurance carrier in the defense of a legal suit and be responsible for the payment of any award that should be made against the physician, if all the following conditions are met:

1. The lawsuit is premised upon the negligence of an MSU student, including MSU residents and fellows, and the liability of the physician is derived from the student's negligence, i.e., is vicarious or secondary;
2. The student's participation involved a level of delegated responsibility which could be reasonably expected of medical students at a similar level of training and experience at the time of his/her assignment;
3. The negligence occurred during the course of an MSU-sponsored educational program in which the physician and/or patient was participating.

Such coverage is extended to all physicians involved in teaching MSU students and trainees in an approved experience, not only those who are members of the on-campus clinical faculty.

The University is generally not responsible for such coverage for residents or fellows who are supported by individual hospitals or a hospital-medical school educational corporation, nor does coverage extend to instances where an MSU student, resident or fellow is ‘moonlighting.’“

When does coverage begin and end?

Coverage is effective as of the date of employment or appointment and ends at termination of employment or appointment. Claims arising from events that occur while coverage is in effect are covered by the University.

What type of insurance does MSU have?

The MSU insurance program consists of two layers, self-insurance and commercial insurance.

If faculty retire or leave MSU, do they need to purchase ’tail coverage’?

No. "Tail coverage” is not needed for professional liability claims covered by MSU.

Is there coverage for faculty/staff volunteer or outside work activities?

Medical professional liability coverage extends to faculty and staff when they are performing services on behalf of the University. Determination of whether the volunteer activity is within the scope of the faculty or staff member’s employment (e.g., is part of a faculty member’s public service or outreach duties) must be made by the dean of the relevant College.

Outside work for pay is subject to provisions of the University policy on Outside Work for Pay, which states in part: “For faculty in the Colleges of Human Medicine and Osteopathic Medicine, if ‘outside work for pay’ includes patient care or regularized administrative or consulting activities significantly related to, but not directly involved in the provision of patient care, the income derived therefrom is subject to the provisions of the Michigan State University Medical Service Plan of the College of Human Medicine and the College of Osteopathic Medicine.”

For complete information, please refer to the Academic Human Resources Policies.

Are there restrictions on coverage for students?

Students are covered only when performing services in approved academic programs, those for which they are enrolled, are registered and have received College approval. This would include a) activities that are an official component of the curriculum, including required and elective courses, b) approved preceptorships, and c) approved field placements in off-campus locations. Students must be under the direction of the University, i.e., under the supervision of faculty in performing the services, and the performance of such services must be within the scope of their education/training. Students are not covered when receiving pay for services or for non-MSU activities that are not approved field placements or preceptorships.

Are other healthcare providers covered under the liability insurance program?

Yes. Nurses, therapists, health care assistants, and other licensed practitioners employed by MSU are covered under the program, provided that they are acting within the scope of their MSU employment.

Does coverage extend to independent contractors?

No. Independent contractors that provide services to the University must maintain their own professional liability insurance for those services.

How is the charge for the professional liability program determined?

Annually, the Office of Risk Management and the HealthTeam Administration conduct a review of HealthTeam provider clinical activity. Information about each provider’s insurance specialty code, percent of employment and percent clinical practice is submitted for external actuarial review. The actuary determines an amount necessary to support the professional liability program for the coming fiscal year. A portion of this amount is allocated to each clinical department and/or college by the actuary according to a formula that is based on type of specialty, percent employment, and percent of clinical practice. Each clinical department determines how the charges will be allocated to practitioners within that department.

How do I respond to requests for verification of professional liability insurance from a hospital or insurance plan?

Refer all requests for insurance verification to the Office of Risk Management and Insurance, 113 Olds Hall, Fax 517 432-3854. Requests must be made in writing using the form supplied by the requesting agency or the MSU form, “Medical Professional Liability Insurance Verification Request”. Insurance verification is sent directly to the requesting agency or institution.

When and how should I report a claim or potential claim?

Provider concerns about an incident, questions from outside agencies, or patient concerns about treatment should be referred to the Office of Risk Management and Insurance, 355-5022, for review and investigation. Early risk management intervention may avert a claim.

In the event you receive a letter from an attorney indicating that a claim may be filed, or legal documents entitled Notice of Intent, Summons, and/or Complaint, contact the Office of the General Counsel, 353-3530, as soon as possible for information on how to proceed. Your failure to do so may adversely affect the University’s ability to defend the claim, which may result in the loss of protection under the University’s indemnification policy.

Where can I get further information about the professional liability insurance program?

Contact Matthew McCabe, Director of Risk Management and Insurance, at 355-5022 or Mccabem@ctlr.msu.edu.

You may also review the following Health Team Policy/Procedures for related information: