The medical malpractice insurance carrier must still cover a doctor who lied on his policy application and who is now being sued. A New Jersey appeals court published this ruling regarding the case of DeMarco v. Stoddard.
Dr. Sean Stoddard had offices in Toms River and Lakewood. He carried medical malpractice insurance with the Medical Malpractice Joint Underwriting Association of Rhode Island (JUA) from 2007 to 2011. Stoddard answered yes when asked if he had at least 51 percent of his business generated in Rhode Island. He in fact had no business in Rhode Island.
Dr. Sean Stoddard operated on the foot of patient Thomas DeMarco, in September 2010. DeMarco's foot got worse and he and his wife filed a medical malpractice claim against Stoddard, who by that time had moved to California. The JUA would not cover the doctor's case after the company learned that Stoddard had no practice in Rhode Island. A court in Rhode Island allowed the JUA to renege on its policy coverage in this case.
Then, DeMarco added JUA as a defendant in the case. Appellate Division Judge Victor Ashrafi wrote, "The DeMarcos are innocent third parties with respect to Stoddard's misrepresentations." He noted that medical malpractice coverage is like car insurance, in that in New Jersey, law requires both. New Jersey requires doctors to carry at least $1 million her occurrence.
This ruling means that even if the doctor who liked on his application for insurance the medical malpractice coverage cannot be cancelled for the innocent patient who seeks compensation for damages suffered.
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