Directors and Officers (D&O) liability insurance is critical for protecting the leadership of Federally Qualified Health Centers (FQHCs) from personal and organizational losses due to lawsuits. However, many D&O policies exclude coverage for regulatory wrongful acts, leaving FQHCs exposed to significant risks. This includes violations of the False Claims Act, HIPAA, and other federal, state, or local regulations.

Why Comprehensive Coverage Matters

  1. Regulatory Actions: Regulatory actions can impose substantial fines and penalties for violations of laws and regulations. Without coverage for regulatory wrongful acts, FQHCs may face crippling financial consequences.
  2. False Claims Act Violations: Imposes liability on organizations that defraud governmental programs. Coverage for these violations is essential to protect against costly legal battles and potential settlements.
  3. HIPAA Violations: Can result in hefty fines and legal costs. Affirmative coverage for HIPAA violations ensures that FQHCs are protected against breaches of patient confidentiality and other compliance issues.
  4. Anti-Trust Violations: Anti-trust laws are designed to promote fair competition. Violations can lead to significant legal costs and penalties. D&O policies should provide coverage for these potential risks.

Real life FQHC Example:

A Midwest-based FQHC approached Marsh McLennan Agency for a review of their D&O liability policy. During our comprehensive assessment, we discovered that their existing policy excluded coverage for regulatory wrongful acts. This left them vulnerable to potential violations of the False Claims Act, HIPAA, and other critical regulations.

In response to the vulnerabilities identified, we implemented an enhanced D&O liability policy that provided comprehensive coverage for regulatory wrongful acts. Additionally, we provided the FQHC with access to regulatory compliance resources, including training programs and compliance audits, to minimize the risk of future violations.

By upgrading to an enhanced D&O liability policy with comprehensive regulatory coverage, the FQHC significantly reduced its exposure to regulatory risks. The new policy provided robust protection against potential legal actions, ensuring that the organization and its leaders were fully covered.

If your FQHC needs a thorough review of its D&O policy, contact Jim Baker at Marsh McLennan Agency.

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