The Transference Phenomenon: Sexual Misconduct & Healthcare Professional Liability Coverage

Post by Lee Floyd
At first blush, it might not seem that a healthcare professional liability insurance policy would cover injuries due to alleged sexual misconduct by a healthcare professional. Instead, one might assume such conduct would not be considered “professional services” or would be an excluded criminal act.
For medical doctors and most other healthcare professionals, this assumption would likely be correct.[1] However, when the sexual misconduct is by a psychiatrist and during the course of a therapeutic relationship, there is a potential for coverage due to what is known as the “transference phenomenon.”
The transference phenomenon is:
[t]he emotional reaction which the patient in therapy has toward the therapist. The patient in therapy ‘“unconsciously attributes to the psychiatrist or analyst those feelings which he may have repressed towards his own parents…. [I]t is through the creation, experiencing and resolution of these feelings that [the patient] becomes well.’” ‘“Inappropriate emotions, both hostile and loving, directed toward the physician are recognized by the psychiatrist as constituting … the transference. The psychiatrist looks for manifestations of the transference, and is prepared to handle it as it develops.’”[2]
This issue is unique to the field of psychiatry and psychiatrists are educated about how to handle this phenomenon. On that basis, some courts have reasoned that allegations of sexual assault during the therapeutic relationship are sufficient to allege “damages arising out of the performance services rendered or which should have been rendered.”[3] 
While some courts have reached a different conclusion,[4] generally one must keep in mind that allegations of sexual misconduct against a psychiatrist may be sufficient to create the possibility of coverage under a healthcare professional liability insurance policy. 

[1] E.g., Snyder v. Major, 789 F. Supp. 646, 649 (S.D.N.Y. 1992) (“[T]he prevailing view is that sexual conduct is not a medical incident for insurance purposes unless the physician is a psychiatrist and the sexual incident arises out of a therapeutic relationship.”); Christopher Vaeth, Coverage of Professional-Liability or Indemnity Policy for Sexual Contact with Patients by Physicians, Surgeons, and Other Healers, 60 A.L.R.5th 239 (1998 & Supp. 2011) (“A mental-health therapist’s sexual conduct has oftentimes been found covered since the development of an intense emotional relationship is an expected part of the therapeutic relationship. The courts have held in many cases, however, that a physician’s sexual acts are not covered since such conduct does not constitute the rendering of professional services.”).
[2] L.L. v. The Med. Protective Co., 362 N.W.2d 174, 177 (Wisc. Ct. App. 1984) (quoting D. Dawidoff, The Malpractice of Psychiatrists 6 (1973) & Heller, Some Comments to Lawyers on the Practice of Psychiatry, 30 Temp.L.Q. 401, 401-02 (1957)).
[3] St. Paul Fire & Marine Ins. Co. v. Mitchell, 296 S.E.2d 126, 127-28 (Ga. Ct. App. 1982).
[4] Dodge v. Legion Ins. Co., 102 F. Supp. 2d 144 (S.D.N.Y. 2000) (holding a patient’s allegation of “kissing, embracing, sodomizing and engaging in intercourse” with her psychiatrist during her therapy sessions was not a covered “occurrence,” which was defined in professional liability policies as act or omission that was neither expected nor intended by psychiatrist; the factual basis of patient’s claim consisted solely of acts that were intrinsically intentional.”).
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