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2. PR
3. PR-00-08

What the form is

The PR 00 08 Blood Banks Professional Liability Coverage Form is an insurance policy form developed by the Insurance Services Office (ISO) that provides professional liability coverage for blood banks on a claims-made basis. This means the policy covers claims that are first made against the insured and reported to the insurer during the policy period or an extended reporting period, provided the wrongful act that led to the claim occurred on or after the policy's retroactive date and before the end of the policy period. The form is designed to protect blood banks from liability arising from errors or omissions in the rendering of their professional services.

Classes of business it applies to

This form is specifically tailored for organizations engaged in the operations of a blood bank. This includes, but is not limited to:

• Collection, testing, processing, storage, and distribution of blood and blood components.
• Donor screening and eligibility determination.
• Typing and cross-matching of blood.

Real-world example: A community blood center that collects donations, tests the blood for infectious diseases, and supplies it to local hospitals would be a typical insured under this form. Similarly, a hospital's in-house blood bank performing these functions could also be covered.

Special considerations

• Claims-Made Nature: It is critical for insureds to understand that coverage is triggered by the timing of the claim, not the occurrence of the wrongful act (as in an occurrence policy). This makes continuous coverage and understanding of retroactive dates paramount.
• Retroactive Date: The policy will specify a retroactive date. Acts occurring before this date are not covered, even if a claim is made during the policy period. Maintaining this date upon renewal or when changing insurers is crucial to avoid gaps in coverage.
• Extended Reporting Period (ERP) or "Tail" Coverage: If the policy is cancelled, not renewed, or if the insurer changes the terms (e.g., advances the retroactive date or switches to an occurrence form), the insured typically has the option to purchase an ERP. This allows for the reporting of claims after the policy period for acts that occurred during the policy term and after the retroactive date.
• Consent to Settle Clause: Professional liability policies often include a clause requiring the insurer to obtain the insured's consent before settling a claim. If the insured refuses to consent to a settlement recommended by the insurer, the policy might limit the insurer's liability to the amount for which the claim could have been settled.
• Defense Costs: The policy will specify whether defense costs are included within the limits of liability or are provided in addition to the limits. This can significantly impact the amount of coverage available for indemnity payments.

Key information for agents and underwriters

• Risk Assessment: Underwriting blood banks involves evaluating the specific procedures and protocols the blood bank has in place for donor screening, blood testing (including for transmissible diseases), labeling, storage, and record-keeping. The quality control measures, staff qualifications and training, and history of incidents or errors are key factors.
• Pricing: Premiums will be influenced by the volume of blood processed, the scope of services offered (e.g., specialized testing or processing), the limits of liability and deductible selected, the blood bank's loss history, and its risk management practices.
• Coverage Gaps: Agents should ensure that clients understand the limitations of a claims-made policy and the importance of the retroactive date and ERPs. It's also important to assess the need for other coverages, such as Commercial General Liability (which typically excludes professional services), Property, Auto, Workers' Compensation, and Cyber Liability, as the PR 00 08 only addresses professional liability.
• Prior Acts Coverage: When moving a blood bank from one claims-made policy to another, ensuring the new policy maintains the original retroactive date (or provides full prior acts coverage) is essential to prevent gaps. Underwriters will scrutinize the applicant's prior coverage and loss history before offering such coverage.
• Policy Limits and Deductibles: Selecting appropriate limits and deductibles requires an understanding of the potential severity of claims a blood bank could face. Errors in blood banking can have severe consequences, leading to significant claims.