NU Online News Service, May 8, 2003, 4:02 p.m. EDT – Healthcare First, an arm of Arthur J. Gallagher & Company, Itasca, Ill., will be adding coverage for infringement of privacy rights to its professional liability policy for Web-based managed care operations.

The Health Insurance Portability and Accountability Act of 1996 imposes stiff fines on organizations that fail to keep personal health information private, and it also gives patients the right to sue organizations that violate HIPAA privacy standards.

The Healthcare First policy will not pay fines imposed by the federal government as a result of privacy law violations, but it will help cover the cost of paying civil judgments, Healthcare First says.

Healthcare First is marketing the coverage. Mount Hawley Insurance Company, a subsidiary of RLI Corp., Peoria, Ill., is the insurer underwriting the coverage, Healthcare First says.

Healthcare First will give discounts to organizations that have HIPAA privacy accreditation from URAC, Washington, according to URAC.