CPHRM Claims Management 3 — Questions and Answers
Question 1: Under a claims-made insurance policy, coverage applies when:
- The incident occurs during the policy period
- The claim is reported during the policy period regardless of when the incident occurred
- Both the incident and report occur during the policy period (Correct answer)
- The claimant files within the statute of limitations
Correct answer: Both the incident and report occur during the policy period
A claims-made policy provides coverage only when both the alleged incident and the claim are reported while the policy is active.
Question 2: A risk manager is asked to preserve all records related to a patient who has threatened litigation. This obligation is known as:
- Mandatory disclosure
- Litigation hold (Correct answer)
- Subrogation
- Spoliation prevention
Correct answer: Litigation hold
A litigation hold (or legal hold) is a directive to preserve all relevant documents and records once litigation is reasonably anticipated.
Question 3: Which type of damages compensates a plaintiff for lost wages, medical expenses, and future care costs?
- Punitive damages
- Non-economic damages
- Economic damages (Correct answer)
- Nominal damages
Correct answer: Economic damages
Economic damages are quantifiable monetary losses including medical bills, lost income, and costs of future medical care.
Question 4: An independent medical examination (IME) in a claims context is typically used to:
- Establish the standard of care
- Obtain an objective assessment of the claimant's injuries and prognosis (Correct answer)
- Determine the treating physician's liability
- Satisfy state licensing board requirements
Correct answer: Obtain an objective assessment of the claimant's injuries and prognosis
An IME provides an independent clinical opinion on the claimant's condition, causation, and future care needs to inform claims valuation.
Question 5: What is the purpose of a subrogation clause in a healthcare liability policy?
- To allow the insurer to recover payments from a responsible third party (Correct answer)
- To transfer policy rights from one insured to another
- To extend coverage to additional insureds
- To limit the insured's right to settle without consent
Correct answer: To allow the insurer to recover payments from a responsible third party
Subrogation allows the insurer, after paying a claim, to seek reimbursement from a third party who was actually responsible for the loss.
Question 6: A 'high-low agreement' in claims settlement means:
- The insurer offers a range of settlement amounts for the plaintiff to choose from
- The parties agree to a minimum and maximum payment regardless of the jury verdict (Correct answer)
- The settlement is contingent on a high court ruling
- The claim is split between high-value and low-value insurers
Correct answer: The parties agree to a minimum and maximum payment regardless of the jury verdict
A high-low agreement caps the defense's maximum payout and guarantees the plaintiff a minimum recovery, reducing uncertainty for both parties.
Question 7: Which discovery tool requires a party to answer written questions under oath before trial?
- Deposition
- Interrogatories (Correct answer)
- Request for production
- Request for admissions
Correct answer: Interrogatories
Interrogatories are written questions submitted to an opposing party who must provide sworn written answers within a specified time frame.
CPHRM Claims Management 3
Under a claims-made insurance policy, coverage applies when: