In its recent decision in Volk v. Ace Am. Ins. Co., 2014 U.S. App. LEXIS 6570 (8th Cir. Apr. 10, 2014), the United States Court of Appeals for the Eighth Circuit, applying Minnesota law, had occasion to consider the definition of “patient” as used in a professional liability exclusion.

ACE’s insured, North Country Home Care, Inc. (“North Country”), was in the business of providing personal care attendant services.  One of the individuals to whom it provided such services, a mentally-handicapped individual, was blinded as a result of a BB gun accident that happened while under the supervision of a North Country personal care attendant.  At the time of the accident, ACE insured North Country under a combined general liability and healthcare professional liability policy.  The general liability coverage was provided on an occurrence basis whereas the professional liability coverage was provided on a claims-made basis.  The ACE policy was in effect from July 5, 2005 through June 26, 2006, which was the date that North Country sold its assets and ceased operations.

In 2009, the guardian for the injured individual gave notice of its intent to file suit.  This notice was forwarded to ACE, which in turn denied coverage on the basis that the incident was properly considered for coverage under the policy’s professional liability insuring section, but that coverage was not available thereunder since the claim was not first made while the policy was in force.  ACE also disclaimed coverage under its policy’s general liability coverage on the basis of an exclusion titled Patient Exclusion that barred coverage for “[a]ny loss, cost or expense arising out of 'bodily injury' to your patients.”  The underlying claimant subsequently entered into a Miller-Shugart settlement with North Country and later brought suit against ACE, arguing that the Patient Exclusion was inapplicable, as the claimant was a “consumer” of North Country’s services rather than a “patient.”  The lower court held in favor of ACE on motion for summary judgment.

On appeal, it was argued that the lower court erred in concluding the claimant was a patient of North Country’s.  Specifically, the claimant argued that the term “patient” – a term not defined in the ACE policy – means someone receiving licensed medical care, and that the North Country personal assistant was not licensed.  In fact, North Country itself was not licensed to provide medical care or medication.  

The Eighth Circuit rejected such a limited term of the word “patient.”  Instead, the court cited to a Webster’s dictionary definition of the patient as “the recipient of any of various personal services.”  Notably, this definition included customers and clients.   With this in mind, the court agreed that the underlying claimant, as the recipient of North Country’s personal care attendant services, was a patient.  In reaching this conclusion, the court observed that the term “patient” was used consistently throughout the ACE policy to establish a distinction between what was covered under the policy’s professional liability coverage part (acts or omissions in providing services to patients) and the general liability coverage part (bodily injury except for injuries sustained by patients resulting from professional services).