By DAN REYNOLDS, senior editor of Risk & Insurance®
It's only been a year or so since Ironhealth, the division of Bermuda-based Ironshore, was formed, but executives with the company say they are already finding interest in a suite of niche drop-down coverages in the highly competitive healthcare field.
"There is a lot of capacity out there. There is a lot of capital chasing a finite number of risks, so our challenge was how do we become relevant to that equation?" Matt Dolan, president of Ironhealth, said in an interview with Risk and Insurance®.
After what he and Chief Operating Officer Randy Oates described as a lot of "wipe-board time," Ironhealth came up with a suite of drop-down coverages designed to compete in the excess market in those spaces where conventional commercial healthcare coverage sometimes comes up short.
Ironhealth was formed in March of 2008, and Dolan said the coverage suite hit the market in May 2008. So far, Dolan and Oates said, the coverage has been well-received. As of early March, Dolan said, approximately 50 insureds had taken it up.
"Which may not sound like a whole lot," Dolan said. "But which is a pretty good number considering that we have only been at this a year."
FIVE CRITICAL AREAS
The coverage seeks to address five areas where hospitals have exposures where conventional underwriters might not specifically tread. Those exposures are child abduction, evacuation, disinfection, public relations and charity work.
In each case, Oates said, the intent of the Ironhealth suite of excess covers is designed to not only reimburse balance-sheet losses related to any losses in those areas, but to also encourage hospitals and other healthcare facilities to proactively address such situations as evacuations or large-scale disinfections of areas that may have been impacted by a hospital-based infection such as MRSA ( methicillin-resistant Staphylococcus aureus), the sometimes fatal infection that plagues hospitals and nursing homes.
"Those are expenses that very rarely will a hospital budget for them," Oates said. "We don't want them to shortcut it because, ultimately, they are most focused on what's best for their patients. By having us as an excess carrier with this drop-down feature, they know that they can get $25,000 or $50,000 of coverage to get in there and take care of the event and be done."
In the case of the charity work that is frequently performed by doctors and nurses, according to Oates and Dolan, the coverage is designed to enable healthcare workers to assist in times of emergency without having to fear a devastating medical-malpractice action.
"It's peace of mind," Oates said. "The hospitals like to do this. They also like this is as a great recruiting tool for doctors and nurses (by saying), 'If you have a strong desire to do charity work, we can help you.' "
Andrew Pickle, an Atlanta-based healthcare placement director for Marsh, said the coverage can end up being an advantage for Ironhealth in the highly competitive healthcare coverage field.
"What we see if it comes down to this quote versus one that doesn't have them you know and they are roughly the same price, of course it's always better to go with this," Pickle said.
He says he has bound programs with Ironhealth in an excess capacity and has sometimes negotiated different limits for clients within the five-element suite that Ironhealth offers.
"Usually what they give out in the standard quote is going to be $25,000 limits on these. You can get those increased, and we have done that routinely," Pickle said.
"A lot of times we increase them based on the need of the client. Are they more interested in the evacuation coverage, or are they more interested in the public relations or the disinfection--whatever it may be, of course, it's going to be different for every client."
With excess limits that tend to range between $25,000 and $50,000, Pickle said such things as evacuation coverage might best come into play for such entities as, say, an individual nursing home in a hurricane-prone area such as Florida, but not for larger players with much more exposure.
"I do a lot of Florida business and we have seen a lot of people have to evacuate homes here and there, and for one nursing home, a $25,000 evacuation expense reimbursement, yeah, that's probably pretty relevant," Pickle said.
"But if you're talking a large chain, if they've got 15 locations across Florida and they have to evacuate 10 of them, $25,000 isn't going to make a dent in it."
May 1, 2009
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