Alert

Under California Law, Medical Malpractice Policies Do Not Cover Medical Board Professional Disciplinary Actions

June 15, 2012

A New Jersey appellate court, applying California law, has held that a medical malpractice liability insurer had no duty to reimburse an insured physician for defense costs incurred in connection with a professional disciplinary action brought against him by the California Medical Board.  Jehan Zeb Mir, M.D. v. Admiral Ins. Co., 2012 WL 1694714 (N.J. Super. Ct. Mar. 27, 2012).

The California Medical Board filed a disciplinary action against a physician in 2003 based on his alleged inappropriate delay in performing surgery.  After unsuccessfully seeking coverage from his malpractice insurer for defense costs, the physician brought suit against the carrier, seeking reimbursement for legal fees incurred in defending against the disciplinary action.  The policy provided coverage for “damages, including loss payments, legal and claims expense” that the policyholder became legally obligated to pay “because of injury . . . caused by a medical incident.”  “Medical incident” was defined as an “act or omission” arising from the provision of “medical services.”  The “Defense and Settlement” provision of the policy provided that the insurer would defend “any claim or suit against the Insured seeking damages to which this insurance applies” regardless of the ultimate merits of “any of the allegations of the suit.” 

The physician argued that the phrase “any claim” should be read separately from the phrase “suit against the Insured seeking damages” in the policy’s “Defense and Settlement” provision.  According to this insured, this untethered the phrase “any claim” from the relief sought by the claim and required the carrier to provide a defense for “claims” that did not seek damages, such as the disciplinary action.  The court rejected this argument.  The court held that the policy unambiguously limited coverage to damages arising out of medical malpractice claims and did not provide coverage for a professional disciplinary action that only sought to suspend or revoke the physician’s medical license.  In doing so, the court noted that California courts previously have held that professional disciplinary hearings before the California Medical Board are not considered “suits for damages.”  The court therefore held that the policy did not require the insurer to provide a defense for an action for which there was no coverage.

The opinion is available here.

Read Time: 2 min
Jump to top of page

Wiley Rein LLP Cookie Preference Center

Your Privacy

When you visit our website, we use cookies on your browser to collect information. The information collected might relate to you, your preferences, or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. For more information about how we use Cookies, please see our Privacy Policy.

Strictly Necessary Cookies

Always Active

Necessary cookies enable core functionality such as security, network management, and accessibility. These cookies may only be disabled by changing your browser settings, but this may affect how the website functions.

Functional Cookies

Always Active

Some functions of the site require remembering user choices, for example your cookie preference, or keyword search highlighting. These do not store any personal information.

Form Submissions

Always Active

When submitting your data, for example on a contact form or event registration, a cookie might be used to monitor the state of your submission across pages.

Performance Cookies

Performance cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.

Powered by Firmseek