“Safe Harbor”: Liens Involved
The Georgia Court of Appeals has recently created a “safe harbor” for an insurer presented with an opportunity to settle a claim that involves certain healthcare liens. S. Gen. Ins. Co. v. Wellstar Health Sys., Inc., provides a typical example of the manner in which a hospital lien could complicate efforts between the claimant and the insurer to settle claims against the insured. In Wellstar, the insured injured a bicyclist. The insured’s liability limits were insufficient to compensate the bicyclist for his damages. A healthcare provider (Wellstar) asserted a lien. The bicyclist accepted policy limits to settle the tort claim against the insured but would not agree to indemnify the insurer. The insurer paid the claimant anyway. The healthcare provider succeeded in enforcing the lien against the insurer in the trial court. The insurer appealed, arguing that the familiar law of offers and counteroffers as applied in Frickey v. Jones conflicted with the potential liability to settling parties arising out of hospital lien law. Although declining to find any such conflict, the court in Wellstar created a “safe harbor” for insurers in the situation in which Southern General found itself.
What Is “Safe Harbor”?