In its recent decision in Admiral Ins. Co. v. Thomas, 2013 U.S. Dist. LEXIS 10754 (W.D. Ok. Jan. 28, 2013), the United States District for the Western District of Oklahoma had occasion to consider the scope of coverage afforded under a medical malpractice liability policy.

The insured, Dr. Rupert Thomas, is a physician in the Oklahoma City area.  Dr. Thomas, through a retail and surplus lines broker broker, applied for a professional liability policy to insure his practice.  The policy, issued by Admiral, provided coverage for claims arising out of “medical incidents,” defined as an “act, error or omission arising out of the: (1) furnishing of ‘professional services’ by the insured.”  “Professional services,” in turn, was defined by the Admiral policy as “work performed by you for others involving specialized training, knowledge and skill in the pursuit of the business stated in the Declarations.”  Finally, the policy’s declarations identified Dr. Thomas’ practice as “gynecology-major surgery.”  Dr. Thomas was later sued for alleged medical malpractice arising out of the delivery of an infant.  Admiral denied coverage for the underlying suit on the grounds that its policy expressly limited coverage to medical malpractice claims arising out of Dr. Thomas’ gynecological or surgical procedures, and as such, did not insure medical pursuits outside of these fields, such as obstetrics. 

Dr. Thomas conceded a distinction between gynecology and obstetrics, and the court observed this distinction in the case law as well.  Gynecology, explained the court, did not include the delivery of a baby.  Thus, while the court agreed that the underlying suit alleged a “medical incident,” the court concluded that:

… the malpractice claim arises from an alleged error occurring during the delivery of a baby. Thus, the claim falls within the definition of obstetrics, not gynecology. Because the policy did not insure Dr. Thomas for medical incidents arising from providing the professional service of obstetrics, the claim is not within the scope of coverage provided by the policy.

Conceding the limitation of coverage in the policy, Dr. Thomas argued that he had expressed a desire to have at least retroactive coverage under the policy for obstetrics.  While this information was communicated to the surplus lines broker, that broker did not convey the same information to Admiral.  The court observed that by Oklahoma statute, a surplus lines broker is the agent of the insured, not the insurer.  As such, the court rejected Dr. Thomas’ argument that the broker’s knowledge of Dr. Thomas’ request for limited obstetrics coverage could be imputed to Admiral.  Accordingly, the policy would be enforced as written with coverage only for gynecology and surgical practices.