Intuitive Surgical hid more than 700 injury claims, its liability insurers allege

Robotic surgery has been attracting strategic and investor interest with a couple of new major gambits emerging in the last 6 months. One of these is Verb Surgical, a joint venture backed by Johnson & Johnson ($JNJ) and Google parent Alphabet ($GOOG), and the other is Auris Surgical Robotics, founded by former Intuitive Surgical ($ISRG) exec Dr. Frederic Moll. And medical device giant Medtronic ($MDT) recently did a deal with Israeli company Mazor Robotics ($MZOR) to establish a foothold in robotic surgery.

An Intuitive Surgical Da Vinci device

They all aim to compete with the industry giant in the field, Intuitive Surgical ($ISRG). But Intuitive Surgical is still fighting to establish robot-assisted surgery as legitimate. It's long battled concerns that this sort of surgery has an unacceptable error rate that causes injury to patients often driven by physician lack of knowledge of and functionality with the system.

The latest issue has been raised by its own liability insurers, Illinois Union Insurance and Navigators Specialty Insurance. They are alleging in a federal lawsuit that Intuitive Surgical hid cases of patient injury when it was applying for insurance coverage. If Intuitive loses the case it could be uninsured for up to one year if a judge allows the companies to rescind their $25 million in coverage, Bloomberg reports.

For its part, Intuitive is accusing the liability insurers of acting deceitfully and breaking their contracts. Courtroom battles are an increasingly common tactic for liability insurers to avoid payouts.

Specifically, Illinois Union said Intuitive disclosed only 24 injury claims, not revealing another 734, when it applied for coverage in 2013, which it said is a "is a massive concealment of claims from an insurer, potentially the most egregious in history."

Intuitive had already set aside about $100 million to address lawsuits from 2014 through earlier this year; the company is already engaged in at least 86 lawsuits.

- here is the Bloomberg story
- and here is the Illinois Union case

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