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Massachusetts top court says one prescription triggers MAG Mutual duty to defend
The ruling found the insurer must pay regulatory defense costs because an allegation tied to prescribing medication is a professional service, even when other allegations are unrelated.
Massachusetts' highest court ruled that MAG Mutual Insurance Company must cover the defense costs for a physician in a medical licensing battle, overturning a lower court that had sided with the insurer.
Insurance Business reports the dispute started after the doctor, who bought a medical professional liability policy effective for the year beginning September 1, 2019, faced a Board of Registration in Medicine complaint.
The policy included limited regulatory defense for proceedings brought by licensing boards tied to either a covered claim or a patient complaint about the doctor’s professional activities. The board complaint alleged the physician prescribed an addictive medication for about six years and also raised other, more criminal conduct allegations.
The insurer refused coverage, arguing the board proceeding stemmed from alleged stalking, trespass, and theft that did not relate to treating patients. The Supreme Judicial Court applied an “in for one, in for all” approach, saying the prescribing allegation was enough to trigger a duty to defend because prescribing is a professional service relying on licensed medical judgment.
The court vacated the judgment for MAG Mutual and sent the case back for further proceedings, highlighting for carriers that one covered line item in a complaint can obligate a full defense obligation.