California veterinarians lose liability insurance option

Broker offers insurance bundle but not standalone coverage

Published: November 10, 2020
By Jennifer Fiala

Veterinary Insurance Services Company photo
VISC Executive Vice President Mark Maeyama said standalone professional liability policies will not be renewed when they expire Dec. 31.

Several hundred veterinarians in California are losing professional liability insurance purchased through the California Veterinary Medical Association's brokerage firm and will need to find coverage elsewhere.

Veterinary Insurance Services Company, a subsidiary of the CVMA, will not renew coverage for individuals when their plans expire Dec. 31, according to an announcement by VISC Executive Vice President Mark Maeyama. "[E]ffective January 1, 2021, you will need to obtain alternative veterinary professional liability insurance coverage," he wrote in a recent letter to policyholders

The change is a result of VISC transitioning to a new underwriter. VISC ended its relationship earlier this year with Allianz Global & Corporate Specialty because "it was clear that Allianz was trending in a different direction, one that may not serve the best interest of the veterinary profession," Maeyama said by email. He did not elaborate.

The new underwriter is CNA Financial Corp., which provides commercial property and casualty insurance. The company is not interested in providing professional liability coverage to individual veterinarians on a "standalone" basis, the letter stated.

In a telephone interview, Maeyama said VISC searched broadly for a vendor of freestanding professional liability insurance but came away empty-handed. "When we went to the marketplace, every carrier we talked to, we were unable to get any of them interested in this segment. ... " he said. 

VISC was established by the CVMA in 2008 as the nation's first member-owned insurance brokerage firm. The program sells a number of products, including worker's compensation insurance, personal insurance lines, life insurance, and employment practices liability insurance. Its professional liability coverage was available as part of a business package policy or on a standalone basis for practitioners who are not practice owners. Many who bought the coverage are relief practitioners, consultants and independent contractors.

"This program offers protection and defense for allegations of professional wrongdoing and negligence," the VISC website explains. "Veterinary Medical Board (VMB) defense coverage is automatically included with a limit of $100,000 per doctor per year."

Maeyama estimated that the coverage for small animal practitioners cost around $225 a year — a relatively low rate that made it a popular option for many California veterinarians. 

He and officials at the CVMA declined to disclose precise numbers of policyholders affected by the change.

Dr. Thomas Hansen, a practitioner in Mountain View, California, is among those impacted. "This is, of course, a major disappointment and yet one more thing to deal with now during a difficult year," he wrote on a message board of the Veterinary Information Network, an online community for the profession and parent of the VIN News Service. "I've maintained coverage through VISC for many years and while I've fortunately never needed them (yet), I was happy with the convenience, cost, and peace of mind."

VISC has not stopped looking for a company willing to underwrite standalone liability insurance policies, Maeyama said. "We want to provide coverage for all policyholders; we're more invested in this process than ever. Our mission is to provide a comprehensive, competitive insurance program for California veterinarians."

In the meantime, VISC has put together a new business owners policy that bundles professional liability with veterinary license defense and business and property equipment coverage.

Maeyama said the bundle, while more expensive, could be useful for some veterinarians who previously had the standalone liability coverage, depending on their situation.

He offered this fictional scenario as an example: A veterinarian who makes house calls and makes a medical mistake is covered by professional liability insurance. But if the patient jumps, causing the veterinarian to break a $5,000 lamp in the home, the veterinarian could be liable as a business person. Similarly, Maeyama said, a practitioner could be held responsible if they lose control of a dog and it bites someone in the home. "Business liability offers coverage to the insured veterinarian for bodily injury and/or property damage to a third party arising from the business operation; it is not the same as professional liability," Maeyama explained. 

The more extensive coverage provided by the bundle is in the neighborhood of $800 a year, Maeyama estimates. "It's the same policy as a practice owner's, only scaled down to fit the needs of the independent contractor veterinarian," he said. 

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