Can I Require Staff to Carry Malpractice Insurance?
Craig Skerpac, MBA
Hospitals have a lot of staff, from nurses, to physician assistants and surgeons. Each serves vital roles, and each interacts with patients in different ways. However, they also all pose risks to patients. As their employer, it is up to the facility to see that they can protect themselves and others. Ensuring that those parties have medical malpractice insurance is one of the ways you must do so. What are some of the actions you must take to complete this task?
Malpractice insurance comes in a lot of shapes and sizes. Usually, it needs to fit every policyholder, from junior residents to tenured physicians. Therefore, it is often best to require parties within the facility to carry their own coverage. However, you might also need to carry a policy provided by the establishment.
Malpractice Coverage in Brief
Malpractice insurance is a type of professional liability insurance. It applies to the mistakes that the services you render cause to others. In a medical setting, mistakes made when treating patients could cause pain, suffering, thousands of dollars in costs and even death. Sometimes, the physician who supposedly caused the harm might face retribution. The affected patient might sue the doctor and the hospital for their losses. Thus, the involved parties might have to compensate those affected.
Let’s say that, during a checkup, one of the doctors neglects to review a patient’s medications with them. At the same time, they prescribe a new medication. But, they did not realize that an interaction will cause an allergic reaction for the patient. Therefore, the patient faces hospitalization and an otherwise-avoidable health setback. They might miss work, face new health challenges and significant down time. They might hold the facility and the physician responsible.
A physician might have avoided the mistake had they remembered to check medications. That is why a patient decides to sue the facility. Your malpractice insurance might help you cover costs associated with such losses. Coverage might pay for legal fees, settlements and related costs.
Successful malpractice suits could hit both the offending physician and the facility hard. Professional reputations could face ruin. Money could drain as settlements appear. The ability to recover might prove long, or even impossible. So, if you are in charge of the facility’s risk management, you must have the means to settle the damage and get business back on track. That's malpractice insurance.
Coverage offered by the Facility
Major hospitals usually have a commercial interest in the work of their employees. And, patients tend to view both the hospital and the physician as associated entities. Therefore, the hospital on its own needs to carry malpractice coverage.
Most facilities carry malpractice insurance in their own rights. Coverage can extend to the facility and most, if not all physicians within. So, should the party who alleges harm sue both the facility and the offending physician, then both groups might have a degree of protection. Most importantly, the facility won’t suffer unduly because of a physician’s mistakes.
However, the facility’s own policy is often very generalized. It might not apply to the most-specific risks that certain physicians might present. For example, a neurosurgeon often presents different risks than a first-year medical student. Even if both have coverage under your malpractice insurance, they might lack some of the specific protection they might need.
Because of the many specific needs of different parties, a simple facility-wide policy might not prove right for everyone. Besides a facility policy, you might need physicians to carry coverage on their own.
Most hospital systems require physicians to carry their own insurance protection. As a result, this requirement might protect both parties. Should the facility’s policy prove a bit inadequate for specific parties, then their own coverage might be able to help. They might even have a legal rule to carry coverage. Many states have laws placing a coverage requirement on the doctor.
Coverage, in that regard, can prove more specific and tailored when doctors need it. Physicians might also be able to add occurrence- or claims-made coverage to their policy, which their facility might not offer. The physician might get higher limits and more-specific coverage for claims made for recent and past events.
Should a lawsuit target only a physician, and not the facility, then the physician should be able to rely on their own coverage. That’s of course a benefit to the physician. Even so, the facility might not have to raise its own risk profile by covering the physician with its own coverage. As a result, the likelihood of having to file a malpractice claim on your facility’s coverage might drop.
So, don’t hesitate to carry malpractice insurance that first your facility and parties within. Nevertheless, require them to get their own coverage as well, when necessary.
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