I’m not sure how often this situation arises in the context of medical professional liability policies.   But, if it’s with any frequency, insurers that write policies in this area should look at their forms to determine if there is an unintended opening to coverage that should be stitched up.

Fetemeh Shahriani visited an Urgent Care and Dr. Moosa Heikali gave her an injection for pain in her knee.  An infection ensued, causing permanent damage to the knee.  At the time of the injection, Dr. Heikali’s medical license had been suspended.

Shahriani filed suit against several parties, including Dr. Heikali and Dr. Bahram Tabibian, the CEO and director of Urgent Care.  His medical license had also been suspended at the time of the incident.  Ass an aside, Dr. Heikali and Dr. Tabibian were also the subject of a criminal prosecution for violating the California Business and Professions Code for the unlicensed practice of medicine.

At issue in General Star Indem. Co. v. F and M Radiology Medical Center, No. 22-2233 (C.D. Calif. Jan. 13, 2023) was coverage for the defendants under a General Star Miscellaneous Health Care Professional Liability policy. The professional liability policy excluded physicians as insureds.

Among other issues before the court was “insured status” and the potential applicability of the Licensure exclusion, which precluded coverage for claims arising out of a “medical incident” -- which was satisfied here -- involving an insured, which occurs during the time that the insured’s professional license had been suspended or revoked.

The court concluded that, on two grounds, it was unable to grant the insurer’s motion for summary judgment.  The issue with respect to Dr. Heikali, the one who administered the injection and did so while his medical license had been suspended, is most interesting.

First, even though the policy excludes physicians as an insureds, Dr. Heikali, the court concluded, may have been an insured, as he may have been working in his capacity as a medical assistant when he gave the injection.  

Second, if Dr. Heikali was working in his capacity as a medical assistant, then the Licensure exclusion may not apply.  The court noted that medical assistants may administer the injection at issue here.  Second, the court observed that the policy was silent on whether the Licensure exclusion applies when the insured is operating in a capacity for which a license would not be required.

So, to summarize, it paid – literally – for a physician to have a suspended license.  Here, it landed insured status that otherwise wasn’t there, and took the now-insured outside the scope of an exclusion designed to preclude coverage for just the situation he faced.  Something isn’t right here.