Malpractice Insurance Considerations for Employed Physicians

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Healthcare providers who work as employed physicians for hospitals or other large networks face unique professional liability risks.  While it might seem convenient for your insurance to be taken care of by your employer, there may be limitations in your policy that you are not aware of.

Limited Scope & Duty

Most employed physicians’ malpractice policies are not written on a broad form; they are limited scope & duty policies. This means that your policy only covers you for claims related to the work that you do for that employer. If the incident that led to a complaint falls outside the scope of your job description or falls within a policy exclusion, you may not have coverage.

If you provide professional medical services outside the scope of your employment, even if it’s as a volunteer or a favor to your neighbor, you need to have a separate policy in order to be covered. Good Samaritan laws protect you only in emergency situations. Many carriers offer moonlighting policies or part-time malpractice insurance policies at discounted rates, so obtaining additional coverage is generally affordable.   

Individual Defense

If you are named in a malpractice lawsuit along with your employer, many times the same defense attorney will be appointed to represent all the parties involved. While there are certainly advantages to presenting a joint defense (reduced cost to the carrier, less “finger pointing” among providers, etc.), oftentimes physicians feel that they are not individually represented the way they’d like to be.

Fear of adverse judgements and negative public perception may increase a hospital's interest in settling claims where the potential damages are large, even when the involved physician believes his or her actions were appropriate and met the standard of care. This can cause issues in the future, since any award or settlement will be reported to the National Practitioners Data Bank and can affect credentialing, future employment, access to insurance, and more.  If you feel that your individual interests are not being served during a malpractice case, ask for your own attorney.

Consent to Settle

Individual physicians and their employers may have different views when it comes to the impact of large verdict cases. Consent to settle becomes a key issue in these instances.  When your malpractice insurance policy contains a consent provision, the carrier must obtain your direct written consent before settling a claim on your behalf.

Consent to settle is important because it allows you to play an active role in the handling of your case. It gives you a voice in your defense.  Make sure you've read your malpractice insurance policy to know your rights when it comes to matters of individual consent or engage with a knowledgeable insurance agent to help.

Conclusion

It's important for physicians contemplating hospital employment to understand the issues surrounding their malpractice insurance coverage at the onset of employment, during employment, and after employment has terminated. The time to ask those questions is before accepting any offer and signing your contract. Take the time to educate yourself and work with a trusted advisor (attorney or insurance broker) to make sure you understand the implications before taking the next step.