Court Ruled Insurers Can Deny Behavioral Care Claims
A recent appellate court decision clarifies that restraint-related injuries may be excluded from commercial liability coverage.
Updated on Oct. 5, 2026 in Insurance
The Sixth Circuit Court of Appeals ruled on September 9, 2026, that an insurance provider has no obligation to indemnify a behavioral care center for a death linked to physical restraint. This decision impacts how commercial general liability policies are interpreted regarding professional services.
Why it matters
The court determined that restraint interventions meet the criteria for professional services because they require specialized knowledge and worker judgment, even when performed improperly. This classification allows insurers to deny coverage under standard professional service exclusions.
The ruling centered on the death of a seven-year-old resident in July 2022. It overturned a district court finding that had previously required the insurer to defend the behavioral care center.
The players
Sixth Circuit Court of Appeals
A federal appellate court that interprets laws and regulatory standards impacting business liability and insurance coverage.
Seven Counties Services, Inc.
The behavioral care center involved in the wrongful death lawsuit and subsequent insurance coverage litigation.
Scottsdale Insurance Co.
An insurance provider that maintains policies for commercial entities and contested its duty to indemnify the behavioral care center.
The details
The Sixth Circuit defined professional services based on three criteria: a requirement for specialized knowledge, the necessity of worker judgment, and regulation by the state. Because the restraint intervention met these benchmarks, the court concluded that the care center's general liability policy's professional service exclusion applied. The court specifically analyzed the nature of the act itself rather than the circumstances, ruling that negligent execution does not strip an act of its professional status.
Timeline
July 2022: Resident died at the behavioral care center.
September 9, 2026: Sixth Circuit issued decision on insurance coverage.
Money Landscape
This ruling follows a established pattern in insurance law where courts distinguish between general operational negligence and professional service delivery. It clarifies the scope of commercial coverage for medical and behavioral health facilities in the state.
Households with loved ones in care facilities should be aware that liability coverage disputes can impact a facility's ability to settle claims or fund legal defenses. Families concerned about facility coverage should consult with a qualified legal professional regarding the specifics of facility liability protections.
The takeaway
This decision underscores that standard commercial liability policies often contain exclusions for activities deemed professional services. If you are assessing the stability of a care facility, discuss their professional liability coverage and how they manage risks associated with patient restraint policies.
Further reading
For broader trends in coverage, visit the Insurance section.
Source note: This article includes information reported by The National Law Review - A Free To Use Nationwide Database of Legal Publications.
