Medical Malpractice News

Vicarious Liability – How it Affects Your Medical Malpractice Insurance

Tags: | Comments: 0 | January 25th, 2011

In general terms, Vicarious Liability is liability one incurs on behalf of someone else’s acts.

Specifically in regard to physician and surgeons medical practices, if you are a single physician with no employees and handle 100% of all patient contact by yourself, then the topic of vicarious liability likely does not apply to you.

For every other physician and their medical practices, vicarious liability is a topic that should be considered, understood and addressed.  As an owner of a medical practice with employees, physicians incur vicarious liability with nearly 100% of their patients, which is why medical liability insurance carriers offer the option to insure physician’s corporations and their W2 employees for free or with minimal additional premium.  If a physician’s practice or employees are named in a medical malpractice claim, the medical malpractice insurance carrier will provide coverage if they are aware of the corporation and those employees.

However, with increases in overhead and decreases in revenue because of changes in reimbursements, etc., it is becoming more common for practices to contract with other physicians and licensed ancillary personnel, such as nurse practitioners and physician assistants, to see and treat patients.  Although these other medical personnel are not directly employed by the physician and practice, the patients perceive them as part of the practice.  Therefore, if a malpractice claim is served against the contracted physician or ancillary staff, the plaintiff’s attorney will likely name the practice and its physicians and employees as well in the medical malpractice lawsuit.  This type of vicarious liability is rarely covered unless an insurance carrier has specifically included it, especially if the contracted personnel are insured through a separate malpractice insurance company.  While the contracted physician or ancillary’s insurance carrier will defend them against that claim, their medical liability insurance carrier will not defend or cover the corporation.  Likewise, the practice’s insurance carrier will not provide defense or coverage in a lawsuit resulting from the actions of the contracted physician or ancillary, unless the carrier has been notified of the relationship and provided vicarious liability coverage on their behalf for additional premium.

As common as this issue is, most physicians and practices do not take the necessary steps to acquire coverage for the vicarious liability they incur on a daily basis.  Consult with your medical malpractice insurance insurance agent, attorney or insurance carrier directly to make sure your vicarious liability is covered, and the minimal premium to include it could save your practice.