Coverage Or No Coverage?

The first thing a person wants to know who has insurance is; Does my policy protect me? This is true no matter if you are living in Grand Prairie, Fort Worth, Arlington, Mansfield, Dallas, or out in Weatherford, Texas.
The United States District Court, Southern District, Corpus Christi Division, had that decision to make in a case styled, National Fire Insurance Company of Hartford, et, al. v. Radiology Associates, LLP, et al., and issued an opinion on March 3, 2010. In this case, a couple sued Radiology Associates, LLP. (Radiology) and one of their employees, Brian K. Riley. Radiology had three insurance companies providing policies for them and Radiology presented the lawsuit to all three companies to provide a legal defense and settle any potential claims.
The facts in the case were that, Mrs. Pecore, a patient of Radiology, was to have a trans-vaginal ultrasound. It was alleged that during this exam, Riley inserted a finger into Mrs. Pecore’s vagina without permission and that Radiology should have informed Mrs. Pecore she had a right to have a chaparone present during the exam and that if a chaparone had been present the “assault” to Mrs. Pecore would not have occurred. There was nothing about the precedure involving the trans-vaginal exam that would have called for Riley to have committed the act he is accused of commiting.
This lawsuit between Radiology and its three insurers was a dispute over whether or not the type of claim being asserted by the Pecores was the type of claim covered by any of the policys of insurance.
The three insurance companies were, National Fire Insurance Company of Harford (National), Continental Casualty Company (Continental), and American Physicians Insurance Company (API). The court dismissed the claims against National and Continental but allowed the lawsuit to proceed against API.
In determining the insurance companies duty to defend the lawsuit being asserted by Mr. and Mrs. Pecore, the court cited Texas law, stating “The duty to defend arises when the facts alleged in the complaint, if taken as true, potentially state a cause of action within the terms of the policy”. They also said that an insurance company is obligated to defend one of its insureds as long as the complaint alleges at least one cause of action within the policy’s coverage. And that the duty to defend is determined by examining the latest amended pleading upon which the insurance company bases its refusal to defend the lawsuit.
The Pecores claim was an assault or wrong committed in the course of medical treatment. These types of wrongs were specifically excluded from coverage in the National and Continental policies. These medical treatment causes of action were not specifically excluded under the type of coverage that may be covered in the API insurance policy.
The court pointed out that even though API is judged to have a duty to provide a defense for Radiology, that does not mean they will have a duty to pay any claim or judgement against Radiology.
This case is a good read for trying to understand the distinction in a claim that has potential medical malpractice implications and one that has assault allegations together in the same case.