An independent voice for ethical adoption
Risk Management: A Common Sense Approach
By Peter J. Wiernicki, Esq.
Peter J. Wiernicki is a principal in the Washington D.C. law firm of Joseph, McDermott & Reiner, P.C. Mr. Wiernicki practices in the areas of adoption law and assisted reproductive technologies.
Child-placing agencies, and other adoption organizations, work in the most sensitive of arenas—the growth of families through the adoption process. One agency may be involved in domestic adoption through its services to adoptive parents, birth parents and children. Another agency may focus solely on intercountry adoption and the facilitation of services to provide for adoption abroad. Regardless of the agency’s specific expertise, it is prudent, and nothing short of common sense, for every agency to evaluate its practices and procedures with an eye towards the reduction of risk.
Risk and liability can take many forms. An agency’s actions, or inactions, may rise to a level of legal liability, where the agency is exposed to a lawsuit. The tort of wrongful adoption is one example of such liability. Additionally, an agency’s conduct may result in consequences short of a lawsuit. For example, an agency’s shortcomings may affect its reputation, thus impacting on the number of families who might otherwise seek its services. Such consequences can affect the agency financially, make it difficult to employ experienced personnel, and affect the morale of those within the agency.
Insurance coverage
An agency, in reviewing its management of potential risk, can focus on a number of specific items and concepts. First and foremost, an agency should evaluate its insurance coverage. Professional liability insurance is a key component to risk management. In increasing numbers, agencies are being subjected to lawsuits for either negligent or intentional conduct.
An agency should consider two types of insurance coverage. An association professional liability policy will provide broad protection for allegations of wrongdoing related to the management and administration of the agency. A directors and officers policy will protect an agency’s officers from individual liability. Ideally, an agency’s insurance coverage should encompass both types of policies.
In assessing insurance coverage, it is critical to understand the scope of coverage. Most of the policies that currently exist for adoption agencies classify adoption services as “unique and special.” Consequently, these polices only cover acts by the agency that are deemed negligent. Intentional acts by the agency, such as fraud or criminal violations, will not be covered. It makes good sense to seek the broadest scope of coverage possible. Moreover, it is a misconception to believe that an agency’s non-profit status will shield it from liability. Insurance policies are contracts, and the agency, as a party to the contract, should thoroughly understand its policy. The agency should understand the scope of coverage, the amount of its deductible, the reporting requirements imposed by the carrier and its right to choose its attorney if the need arises.
The agency should become comfortable with the concept that insurance is a business necessity and not simply a business luxury. A common misconception that many agencies have is the belief that there is greater chance for exposure to a lawsuit if the opposing party discovers that the agency has insurance. There is nothing that supports such a belief. Any realistic assessment of risk involves a balancing of interests. The value of the protection afforded by insurance coverage far outweighs the wishful thinking that lack of coverage will dissuade a potential litigant.
Another common misconception is that insurance coverage is only necessary for larger agencies that employ a large staff and handle a significant number of adoptions. Once again, this notion has little merit. The size of the agency is irrelevant to the need for insurance coverage.
Wrongful adoption
An agency, in reviewing its management of potential risk, can focus on a number of specific items and concepts. First and foremost, an agency should evaluate its insurance coverage. Professional liability insurance is a key component to risk management. In increasing numbers, agencies are being subjected to lawsuits for either negligent or intentional conduct.
An agency should consider two types of insurance coverage. An association professional liability policy will provide broad protection for allegations of wrongdoing related to the management and administration of the agency. A directors and officers policy will protect an agency’s officers from individual liability. Ideally, an agency’s insurance coverage should encompass both types of policies.
In assessing insurance coverage, it is critical to understand the scope of coverage. Most of the policies that currently exist for adoption agencies classify adoption services as “unique and special.” Consequently, these polices only cover acts by the agency that are deemed negligent. Intentional acts by the agency, such as fraud or criminal violations, will not be covered. It makes good sense to seek the broadest scope of coverage possible. Moreover, it is a misconception to believe that an agency’s non-profit status will shield it from liability. Insurance policies are contracts, and the agency, as a party to the contract, should thoroughly understand its policy. The agency should understand the scope of coverage, the amount of its deductible, the reporting requirements imposed by the carrier and its right to choose its attorney if the need arises.
The agency should become comfortable with the concept that insurance is a business necessity and not simply a business luxury. A common misconception that many agencies have is the belief that there is greater chance for exposure to a lawsuit if the opposing party discovers that the agency has insurance. There is nothing that supports such a belief. Any realistic assessment of risk involves a balancing of interests. The value of the protection afforded by insurance coverage far outweighs the wishful thinking that lack of coverage will dissuade a potential litigant.
Another common misconception is that insurance coverage is only necessary for larger agencies that employ a large staff and handle a significant number of adoptions. Once again, this notion has little merit. The size of the agency is irrelevant to the need for insurance coverage.
Practices that reduce risk
An agency should evaluate the contracts, agreements, and forms that it utilizes. It should look carefully at the pre-placement agreements that it requires its families to sign. Is the agreement clear and straightforward? Does the agreement clearly identify the responsibilities of each party? Is their any confusion over the adoptive parent’s financial obligations? Such agreements should contain reasonable limitations on the agency’s liability. For example, it would be unlikely that an agency involved in inter-country adoption would wish to warrant that each piece of a child’s medical history was 100% accurate. Parties to such pre-placement agreements may be asked to assume certain risks. An assumption of risk provision can shield the agency from future allegations of wrongdoing.
Agencies should avoid utilizing blanket waivers of liability. Of questionable legality and enforceability, such broad waivers are often found to be offensive and place the agency in a negative light. Asking adoptive parents to sign an agreement to waive the agency’s liability requires the agency to realistically assess what it can, and cannot do, in an adoptive placement. For example, the agency may ask its adoptive parents to hold it harmless should the agency fail to realize that the adoption law of a country has changed. The agency may be working in an environment overseas where it is difficult to obtain accurate medical information. The agency should make such difficulties clear to the adoptive parents and ask that they agree to waive any liability on the agency’s part if medical information is incomplete or unclear.
Finally, each agency, regardless of its size, should evaluate its internal policies and procedures. If the agency is large enough, does personnel training occur on a regular basis? Does the agency have a policy about returning telephone calls within 24 hours? Does the agency ensure that its families are updated on their case on a regular basis? Does the agency utilize a “tickler” or call-up system so that outstanding matters are not simply forgotten?
Risk management is an on-going process. It begins with a critical and thorough self-examination of how services are provided. Regardless of an agency’s size, it makes good practical and business sense to create, and stick with, a plan to assess potential risk.
Reprinted with permission from Joint Council on International Children’s Services Winter 2003 Bulletin.
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