Vicarious liability is a legal doctrine in which a party is held legally responsible for the negligence of another because of its relationship to the wrongdoer. Courts have generally used the employer-employee or the agency principle to hold medical entities vicariously liable for the negligence of its health care providers
This is one of the most important areas of medical malpractice insurance to look into; to make sure you've got all of the entities and clinics and facilities with which you are affiliated insured.
The fact is that any entity, not only a person, can be named in a medical malpractice insurance claim, and eventually held liable for damages. Hospitals can therefore be asked to pay damages for any number of reasons, such as direct negligence, premise liability, etc. This concept called: Vicarious liability is indirect legal liability.
In most circumstances, this arises from an employer-employee relationship. Vicarious liability can also arise from a principal-agent relationship, and under some circumstances, an independent contractor can be deemed to be an agent.
How can hospitals, Endoscopy Labs, Surgery Centers, Laser Spa's or even Hearing Centers be held liable for the negligent acts of its doctors and staff? . Where there is an employer-employee relationship (e.g., nurses and some doctors hired by the hospital), respondeat superior is the basis for liability. Respondeat superior means "let the master answer." The idea behind this rule is to ensure that the employer, as supervisor, will enforce the proper work standards to avoid risk of harm.
Where the negligent actor is an independent contractor rather than an employee, the circumstances surrounding the relationship and the supervision will dictate the court's ruling. Many medical entities do not exercise usually does not exercise substantial control over the actions of independent contractors. Most doctors who work in private hospitals are independent contractors, as they do not draw a hospital salary, nor are their work hours and work duties controlled or defined by the hospital. Having physicians as independent contractors in stead of employees thus inoculates the hospital from vicarious liability.
However, depending on the facts, there is some case law that allows for the relationship to exist especially where it is unclear about the status of the physician or ancillary medical provider. Agency may be established if there is some degree of control, even if minimal, that is exerted on the doctor. The relationship may be construed as an apparent or ostensible agency, where there is some representation that the doctor works for the hospital. Finally, courts have occasionally used the legal doctrine of nondelegable duty to find a hospital liable, holding that the services provided, as in the radiology or emergency departments, are a hospital's "inherent function."