What Are the True Risks of Vicarious Liability?
Gallagher Healthcare :: Industry Insights
By Gallagher Healthcare | 10/21/2013As medical practices expand in size, an increased number of professionals come into contact with patients. This has many positive results: patients can get multiple opinions and diagnoses, allowing their treatment to be more well-rounded, and doctors can expand their patient network by bringing nurse practitioners and physician assistants on board. However, these additions can also bring added risk to doctors in the form of vicarious liability.
Vicarious liability occurs when employees of a business come in contact with a client or patient. This can be troublesome when it comes to medical malpractice insurance, as a general policy form may not have any endorsements that address vicarious liability coverage. Should a lawsuit be brought by a patient against your practice, the doctor who owns the practice can be named in it, even if that doctor never had any contact with the patient. Additionally, if the main provider of treatment was a contractor rather than an employee, this contractor may have malpractice insurance of his or her own, resulting in a dispute between multiple carriers over which is responsible for coverage in the suit. In some cases, this can result in the carriers denying coverage due to unclear language in the policies.
Because of all the possible loopholes and technicalities, it is important that doctors carefully review their insurance policy to ensure that their carrier will insure any employees or contractors in their practice. Different carriers have different ways of dealing with vicarious liability. Some include coverage for “allieds”—lab technicians, office assistants—in the general policy form while requiring “physician extenders,” including nurse practitioners, physicians’ assistants, nurse anesthetists, and others, to be specifically named. However, this varies by carrier, so it is important that all issues be discussed before a policy is agreed upon. Indeed, doctors are encouraged to seek out legal counsel in order to ensure that no coverage is overlooked. The cost of retaining an attorney may be considerable, but paying this amount up front is preferable to the worst case scenario of the carrier denying coverage of a claim based on ambiguous language in the policy’s wording.