Professional Services Exclusions Bar Coverage for Failure to Give Prescribed Drugs to Prisoner

Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that “medical services” and “professional services” exclusions in general liability and umbrella policies issued to a private prison operator barred coverage for a civil rights claim of an inmate who died while in custody due to the failure of the prison to provide prescribed doses of benzodiazepine. LCS Corrections Servs., Inc. v. Lexington Ins. Co., 2015 WL 5155056 (5th Cir. Sept. 2, 2015).

“Medical Services” was defined to include “medical, surgical, dental or nursing treatment to such person or the person inflicting the injury including the furnishing of food or beverages in connection therewith”; or “furnishing or dispensing of drugs or medical, dental or surgical supplies or appliances if the injury occurs after the Named Insured has relinquished possession thereof to others.” The parties agreed that the latter subpart of the definition did not apply, but the court determined that the disjunctive “or” in the definition required it to consider each subpart independently. The court rejected the insured’s argument that the inmate died due to the insured’s administrative policy not to provide certain medications rather than a failure to render medical services. Even if no specific professional decision was made in denying the prisoner medication, the court held that “providing and administering medicine to an inmate is a medical service, which [the insured] failed to render, for whatever reason.”

The “professional services” exclusion bared coverage for “liability arising out of the rendering of or failure to render professional services, or any error, or omission, malpractice or mistake of a professional nature committed by or on behalf of the ‘Insured’ in the conduct of any of the ‘Insured’s’ business activities.” The term “professional services” was undefined, and the court applied a general definition: “[t]he task must arise out of acts particular to the individual’s specialized vocation, [and] . . . it must be necessary for the professional to use his specialized knowledge or training.” The insured did not contest that distributing medications to inmates requires professional training, care and judgment. Instead, the insured argued that administrative personnel adopted a policy of refusing to provide certain medications, and that development of the policy did not require the exercise of professional skill or judgment. The court rejected this argument, reasoning that the underlying plaintiff had alleged “only a failure . . . to provide a professional service, i.e., the distribution of medication to [the inmate]. Even if the policy were adopted for administrative reasons, the effect of the policy is that [the insured] failed to provide a professional service to an inmate, which is alleged to have caused [his] death.”