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How Vicarious Liability Impacts a Medical Group’s E&O Insurance


How Vicarious Liability Impacts a Medical Group’s E&O InsuranceReview Your E&O Policy for Coverage Specifics

Vicarious liability is legal doctrine that assigns liability for an injury to an individual who did not cause the injury but who has a particular legal relationship to the person who did act negligently. Basically, it’s indirect legal liability. As an owner of a medical group with employees, physicians incur vicarious liability with nearly 100% of their patients. These individuals are typically (should be) added as insureds to a group’s Medical Malpractice or Errors & Omissions (E&O) insurance policy.

But today, with higher overhead and decreased revenue, medical practices are increasingly contracting with other physicians and licensed ancillary personnel, such as nurse practitioners and physician assistants, to see and treat patients.  While these other medical personnel are not directly employed by the practice, patients perceive them as part of the medical group. Should a malpractice claim be filed against the contracted physician or ancillary staff, the medical practice and its physicians and employees will likely also be named in the lawsuit. Hence, the increased vicarious liability exposure that exists on the part of the medical group.

What’s important to note is that not all medical group’s E&O insurance includes protection for vicarious liability. An insurance carrier has to specifically include the coverage, particularly 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. Equally, the practice’s insurance company 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 you can see, working with E&O specialists is important when customizing an insurance program for medical groups and ensuring such potential exposures as vicarious liability are covered. Axis Insurance Services partners with carriers that provide the type of custom Medical Malpractice insurance a medical practice requires. We can design a policy that includes protection for such as issues as vicarious medical malpractice, punitive damages, HIPAA compliance and implementation, outsourced vendor utilization and credentialing.

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Blogged on: October 13, 2014 by Mike Smith
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