Wilson Elser Wilson Elser Moskowitz Edelman & Dicker LLP Colorado Springs, Colorado June 23, 2007 Martin M. Ween Senior Partner 63

Wilson Elser

Wilson Elser Moskowitz Edelman & Dicker LLPwww.wilsonelser.com

Colorado Springs, Colorado

June 23, 2007

Martin M. Ween Senior Partner

6363rdrd Annual Convention & Expo Annual Convention & Expo

Association of TeleServices InternationalAssociation of TeleServices International

Five Biggest Claims Against ATSI’s E&O Insurance Program:Five Biggest Claims Against ATSI’s E&O Insurance Program:

What Lessons Can Be LearnedWhat Lessons Can Be Learned

Albany • Baltimore • Boston • Chicago • Connecticut • Dallas • Houston • Las Vegas • LondonLong Island • Los Angeles • Miami • New Jersey • New York • Orlando • Philadelphia

San Diego • San Francisco • Virginia • Washington, DC • White Plains Affiliate Offices: Berlin • Cologne • Frankfurt am Main • Munich • Paris

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Claim #1Claim #1• Claim by the family of a patient who died from internal

bleeding after undergoing surgery at an outpatient facility. It was alleged that the telephone answering service for the facility failed to verify that an on-call physician responded to four telephone calls.

• The telemessaging service argued that it was a “call and cancel” account, while the facility argued that it was a “follow-up account.”

• As a result of mediation and settlement negotiations, this claim was resolved for an amount in excess of $400,000.

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Lessons to be learnedLessons to be learned

• Contracts between telemessaging services and their clients should be clear as to the nature of the services to be performed, as well as what is not to be performed

• Contracts should be reviewed periodically and amended if there is any change in the scope of work or nature of the arrangement

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Claim #2Claim #2• Lawsuit alleging that an answering service failed to notify

a doctor or his medical group as to the admission of the claimants’ son to the hospital, so that the doctor could examine and treat the child. The child allegedly sustained permanent heart damage after going into cardiac arrest.

• The answering service maintained that it notified the doctor but could not prove it as it only retained written call logs and audio tapes for 30 days

• A settlement was reached in the amount of $20,000 after discovery revealed that there were other means by which the answering service could prove the message had been passed on.

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• The longer records can be retained, the better off you will be in the event a claim is asserted against you.

• While it would be ideal if records could be retained forever, a rule of thumb that may be employed is to retain the records for as long as the statute of limitations on any cause of action that may be asserted against an answering service.

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Claim #3Claim #3

• Claim alleging that an answering service involved in locating underground utility cables for construction projects never dispatched a request for location of cables. The claimant alleged that an underground cable was cut during construction allegedly resulting in damages in excess of $12,000.

• A review of the answering service’s records appeared to confirm the answering service’s contention that it never received the request.

• A settlement was reached representing a savings on defense costs.

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• Unfortunately, the only lesson to be learned from this claim is that even if an answering service does everything right, a claim can still be made against it. It is simply impossible to prevent a claim from ever being asserted against you.

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Claim #4Claim #4• The contract between an answering service and a

physician’s group required the service to contact the group’s on-call physician. At a patient’s request, the answering service instead contacted the patient’s treating physician. The patient died and a lawsuit was brought, wherein it was alleged that the answering service breached its contract

• Even if the answering service did not follow its client’s instruction, we argued that this alleged failure did not cause the patient’s death.

• This claim was ultimately resolved for a payment of $65,000.

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• All operators and other personnel must be fully and periodically trained and instructed to follow agreed upon procedures, including what to do in emergency situations.

• Contracts should also clearly set forth what the procedures are for as many situations as possible

• You may also want to consider including limiting language in the contract as to liability for situations that are outside the scope of what is set forth in the contract

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Claim #5Claim #5• A telemessaging service contracted with a security

company, whose client was a paper manufacturing company. A claim was asserted against the telemessaging service and others for allegedly failing to properly forward an alarm as to a sprinkler going off in the warehouse, purportedly resulting in significant damages to the paper company.

• The telemessaging service waited over 1 year to report this matter to its insurer, until a lawsuit was filed.

• After discovery took place, a settlement was reached, with payment of $50,000 on behalf of the answering service.

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• Claims must be reported to the insurer as soon as possible, as delaying in reporting claims can lead to denials of coverage.

• Promptly reporting claims may result in a savings in time and expense.

• In addition, a conflict existed between the testimony of two employees as to exactly what happened. If the insurer had been advised earlier, an investigation would have disclosed this information and allowed the insurer to clarify what exactly happened.

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General Considerations

Relating To Claims Against

Telemessaging Services

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I. Prevention

II. Mitigation

III.Resolution

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Contractual Protections

I. Contractual provisions, such as liability limitation clauses and damage limitation clauses

II. Clear description of duties and responsibilities

Prevention of ClaimsPrevention of Claims

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Internal Policies and Procedures

I. Record-keeping, including record retention programsII. Agreed-on “scripts”III. ChecklistsIV. Written procedures manualsV. Documented training of personnelVI. Clear disclosure of applicable policies and

procedures to the clientVII.Attention to detail, enforcement and communication

Prevention of ClaimsPrevention of Claims

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I. Promptly notify insurers to prevent coverage problems and to allow the insurers and their representatives to investigate, appoint legal counsel and take other steps

II. If the health or safety of someone can be protected, or if the incurring of damages be reduced or eliminated by quick action, you may have a legal and/or contractual duty to act

III. When a claim is made, gather information as soon as possible, which should be separated and preserved

IV. Don’t talk to anyone about the claim, until you have spoken with your insurer and/or your attorney

V. Cooperate with the insurer, its representative and legal counsel

Mitigation of ClaimsMitigation of Claims

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VI. Other parties may have caused or contributed to the problem and therefore, should be involved. You may be able to demand that these other parties defend and/or indemnify you for your losses

VII. Obtain errors and omissions insurance, as it helps to reduce your exposure to damages and defense costs and gives you an opportunity to obtain professional and legal advice

Mitigation of ClaimsMitigation of Claims

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Resolution of ClaimsResolution of Claims

I. After analyzing liability and exposure versus the cost to settle, it may be a good time to settle, as settling claims can save on the cost of defense and end a potentially distracting and time consuming situation

II. If a settlement is reached, clearly define the dispute that is being settled, in order to ensure that you are not giving up any rights or claims that you may want to later assert

III. Try to include as many parties as possible in the settlement

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IV. A settlement is accomplished by all parties executing some form of written settlement agreement or release, which should be drafted, or at least reviewed by legal counsel who are licensed to practice law in the state which laws will control interpretation of the document

V. The written agreement or release should fully describe the dispute that is being settled, as well as how much is being paid; who is paying; who is being paid; and by when the payment is to be made.

VI. Make sure your insurer is involved

Resolution of ClaimsResolution of Claims

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For more information, please contact:For more information, please contact:

Martin M. WeenSenior Partner

150 East 42nd StreetNew York, NY 10017-5639

T: 212.490.3000F: 212.490.3038

Documents

Wilson Elser Wilson Elser Moskowitz Edelman & Dicker LLP Colorado Springs, Colorado June 23, 2007 Martin M. Ween Senior Partner 63