A doctor who has been negligent may not be the only defendant in a medical malpractice suit. Often the plaintiff names many people in the claim: The IPA, the hospital that retained the doctor on its staff, surgery center, the group that hired or contracted can be held vicariously liable for the doctor's negligence under a theory of "respondeat superior."
Respondeat Superior
Respondeat superior is a legal principle that holds an employer liable for the negligence of its employees in certain circumstances. The negligent act must have occurred within the "scope of employment or supervision” of the health care or employing entity. The issue that often is at the center of these cases is: When exactly is an employee acting within the scope of employment?
Generally, an employer may be held vicariously liable for the negligence of an employee if:
The injury occurred while the employee was on the clock; the injury was caused by an activity the employee was hired to perform; and the employer benefited in some way from the activity the employee was performing at the time of the injury.
Since treating patients and performing surgeries are activities that usually fall within a doctor's scope of an employment, hospitals, medical groups and surgery centers (closed staff model) may be liable for any injuries negligently caused by their doctors during treatment or surgery.
Covering the vicariously exposed, contracting insured entity:
We at The Doctors Insurance Agency are often asked to provide coverage to these entities where the physician or allied healthcare provider (nurse practitioner or physician assistant) is insured elsewhere. This type of exposure is commonly referred to as vicarious liability coverage on behalf of the entity. Vicarious liability is essentially defined as liability for the acts of someone else. Theoretically, entities cannot commit malpractice but they can be held vicariously responsible for the actions or inactions of a physician or allied healthcare professional they employ or contract with to deliver services.
Shared limits or Separate Limits for nurse practitioners
On individual physician policies, physician assistants and nurse practitioners will often share limits of liability with the insured physician for a fraction of the cost of providing a separate limit of liability for the PA or NP. In the event of a claim, the physician’s limits are affected/reduced by any defense or indemnity costs attributable to the PA or NP. This leaves less limits available to the physician in the event they are also named in the claim which is almost always the case.
In the event that the PA or NP is insured elsewhere, the supervising physician will almost always be named and their policy will need to respond. If there is no vicarious liability link for the supervisory aspect, then the physician can be bare for this exposure. Therefore, physicians should make sure they are covered for any vicarious exposure created for supervising PA’s or NP’s not insured under their individual policies. Often times it is less expensive to insure the PA’s or NP’s under the individual physician policies then to pay the vicarious liability charge (often 10% of the physician’s malpractice premium). (to borrow a phrase, we should all ‘know the gaps’ and understand when this nexus/connection between the NP, PA needs to be insured on the policy.
In the event of policies that have a separate limit of liability for the entity, vicarious liability coverage can be extended to physicians insured elsewhere for a fee. Again, although entities cannot necessarily commit malpractice themselves, they can employ/hire or contract with physicians who can be held liable for malpractice and must ensure that they are covered for this vicarious liability. The Doctors Insurance Agency understands this exposure and can work with your practice to ensure that you have protected yourself for this possibility.