Civil Division - New Castle County February 10, 2004
The Honorable Vincent P. Meconi
Delaware Department of Health and
1901 N. duPont Highway
New Castle, DE 19720
Re: Reimbursement for Medical Malpractice Insurance
Dear Secretary Meconi:
You have asked “whether the State is required to carry [medical] malpractice insurance[?]” In addition, you have asked, “if the State reimburses individuals for [malpractice insurance] premium costs, or a portion thereof, does that affect sovereign immunity.” For the reasons stated below, we conclude that Delaware law does not require the State to carry medical malpractice insurance for its employees and, further, the State’s practice of reimbursing health care professionals for a portion of the costs of insurance that they procure personally does not result in a waiver of the State’s sovereign immunity.
By way of background, you have advised that over the past eighteen years the Department of Health and Social Services (“DHSS”) has offered reimbursement for a portion of the costs of procuring medical malpractice insurance to certain full-time healthcare professionals (i.e. physicians, dentists, nurses and nurse practitioners) employed by the State. The reimbursement is calculated based upon a formula, which apportions available funds among those employees who the Department has identified as “qualified” for reimbursement. The level of reimbursement is recalculated each year and increased in proportion to any increases in the DHSS budget as appropriated by the General Assembly. You further indicated that this program of partial reimbursement is provided in an effort to attract “qualified, fully licensed applicants to [DHSS] facilities.”
Additionally, we have been advised by the Delaware Insurance Coverage Office that the State has not procured any commercial insurance or undertaken any self-insurance program that would cover the risks associated with the provision of services by the State’s healthcare professionals.
In response to your initial question, the State is not obligated to carry malpractice liability insurance to cover the activities of its healthcare providers. The General Assembly has never enacted such a statutory mandate nor has it authorized any appropriation for the purpose of funding malpractice insurance coverage for these services. Therefore, there is no legal obligation to provide such coverage.
You have also asked whether the State’s historical practice of reimbursing its healthcare professionals for a portion of the costs they incur in obtaining malpractice liability insurance could have the effect of waiving the State’s sovereign immunity.
The State is immune from suit unless the General Assembly has enacted a statue waiving that immunity. Del. Const. Art. I, §9; Pauley v. Reinoehl, 2003 WL 22998853 (Del.); Shellhorne & Hill, Inc. v. State, 187 A.2d 71 (Del. 1962). In 1969, the General Assembly enacted the State Insurance Program, now codified at 18 Del.C. ch. 65. The purpose of the Act was to provide protection for both the public and the state by waiving sovereign immunity and permitting members of the public to bring suit against the State for alleged wrongful acts while at the same time protecting the State from direct exposure on such claims through a program of insurance coverage. See Turnbul v. Fink, 668 A.2d 1370, 1374-77 (Del. 1995). Where, however, there is no commercial insurance or self-insurance program to protect the State against a particular wrongful act, then such wrongful act is not covered by the State Insurance Program and the State’s sovereign immunity has not been waived. Id. at 1376; Doe v. Cates, 499 A.2d 1175 (Del. 1985). See also 18 Del.C. §6511.
Therefore, the critical issue in determining whether the State has waived its sovereign immunity is whether it has procured insurance to cover the risks at issue. As previously stated, in this context, it has not. The fact that it reimburses its employees for a portion of the costs they incur when they personally obtain malpractice insurance is of no legal consequence and does not effect the State’s immunity.
While not directly related to your request, we believe it is important to note that the DHSS should ensure that neither it nor any other department or agency of state government is named as additional insured party as to any liability insurance obtained by its healthcare providers. By permitting itself to be named as an additional insured on an employee’s personal liability policy, the DHSS may effectively be waiving its sovereign immunity to the extent of the coverage provided by that policy.
Finally, whether the State’s healthcare employees obtain private liability insurance for themselves or not, they are protected from liability “even when they are arguably negligent, where [they] act within the scope of their duties, in good faith and without gross negligence.” Pauley v. Reinhoehl, 2003 WL 22998853 at *9 (footnote omitted); 10 Del.C. §4001.
In conclusion, the State has no legal obligation to pay for, or provide, medical malpractice liability insurance to its employees; and, its practice of reimbursing employees for part of the cost of such insurance which they obtain themselves does not result in a waiver of the State’s sovereign immunity. As mentioned, however, the State should avoid allowing itself to be named as an additional insured on any employee’s personal liability policy since by so doing it raises the issue as to whether it has waived its immunity to the extent of employee’s coverage.
Please do not hesitate to contact this office if you have any questions or require any additional information.
Very truly yours,
Keith R. Brady
Assistant State Solicitor
Malcolm S. Cobin
Cc: The Honorable M. Jane Brady, Attorney General
Phil Johnson, Opinion Coordinator