Individuals and companies take out errors and omissions insurance policies (E & O insurance) in case negligence occurs during their handling of a matter for a customer or client. Without an E & O policy, a professional who provides services or advice could have to pay the entire cost of defending against another party's negligence claim, as well as any damages awarded as a result of the claim if it is attributable to the negligence of the person that provided the underlying service. Professional liability insurance such as an E & O policy is purchased in addition to general liability insurance, which only covers certain kinds of harm such as property damage and personal injury.
According to the California HealthCare Foundation, since 2002, workplace health insurance premiums in California have risen 185 percent, far outpacing the state's inflation rate of 33 percent. This increase in employers' health insurance rates is expected to continue even as medical spending is down and uncompensated care has decreased significantly.
When it comes to contract negotiations between hospitals and insurers, deadlock is not uncommon. Both sides must account for a multitude of factors in an ever-changing health care industry, and sometimes extended negotiation is necessary to reach an agreement that is favorable for all parties involved. However, the details of such disputes are rarely widely publicized.