You are about to leave Risk Strategies website and view the content of an external website.
You are leaving risk-strategies.com
By accessing this link, you will be leaving Risk Strategies website and entering a website hosted by another party. Please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of Risk Strategies website. We encourage you to read and evaluate the privacy and security policies of the site you are entering, which may be different than those of Risk Strategies.
Healthcare organizations create comprehensive risk management strategies to ensure patient safety, data privacy, regulatory compliance, and more. For in vitro fertilization (IVF) clinics, this planning has grown increasingly complex. Unfortunately, no catchall insurance policy encompasses all the risks associated with IVF activities and equipment. So, IVF clinics and sperm banks need to map their specific risks against existing insurance policies to identify coverage gaps. Consider these exposures:
IVF clinics collect, work with, and store human tissue in connection with fertility treatments. Tissue intake can involve freezing sperm, eggs, and fertilized eggs in cryotanks. A mechanical failure in a tank can compromise the tissue, rendering it unusable.
Obtaining insurance for this exposure can be challenging, because calculating and pricing coverage requires quantifying the tissue value. How do you put a price tag on eggs, sperm, and embryos? The perceived value varies from person to person and can depend on circumstances.
IVF clinics historically have managed this risk by bearing the cost of recreating the lost tissue through additional donations or alternative solutions. However, this doesn’t address scenarios such as divorce, death, or other unforeseen circumstances, further complicating the valuation process. Some patients may think, “My opportunity to get pregnant or to save part of me is gone.” There’s no way to value that loss.
The commercial insurance market provides limited coverage for tissue intake due to the difficulty in determining appropriate compensation.
IVF clinics have procedures and protocols to deliver a high standard of care, but human error can lead to an honest mistake. Perhaps, due to a process mishap, a technician inadvertently fertilizes an egg with the wrong sperm. Or a woman ends up with the wrong embryo in her uterus.
How does an insurer value the pain and suffering of the individuals involved or the legal complexities of making an error with genetic material? How do you price reputational risk? One high-profile mistake can threaten an IVF clinic’s survival.
By the time an individual or couple enters an IVF clinic, they often feel emotionally raw. Some scrape together funds to cover the cost, desperate to start a biological family.
Emotions and financial stress together can amplify the potential for litigation. Add a tank failure or procedural mistake that dashes the patient’s hope, and you have a potential recipe for a nuclear verdict. Also, IVF involves touching patients in intimate areas, creating the possibility of molestation claims.
The largest claim losses for IVF clinics come from tank failures. As a result, property and casualty insurers generally exclude these tanks when underwriting insurance. Similarly, employment practices liability (EPL) policies typically exclude molestation.
So, it’s vital to catalog your risks and then review all your policies to see how your coverages would respond to each exposure. Do you have overlapping coverage where two policies might work together to cover a claim? Conversely, do you have coverage gaps that will require you to pay certain claims out of pocket? If yes, are you comfortable self-insuring these risks, or do you need to explore alternative risk financing?
In particular, look at the interplay between these coverages:
IVF clinics have unique risk exposures. So, you’ll want to collaborate with an internal and/or external risk management professional who understands the full picture. Review your exposures and assess insurance adequacy at least once a year, ideally 120 days prior to your insurance renewal date. These periodic analyses will help protect your clinic from potential liabilities and safeguard your patients' best interests.
Want to learn more?
Find James on LinkedIn, here.
Connect with the Risk Strategies Management Liability team at MLPG@risk-strategies.com.
About the Author
With 27 years of experience placing and managing executive liability programs, James Sheehan focuses on health systems and specialty health providers. He is one of the nation’s foremost insurance advisors for IVF clinics and other reproductive health services.