Most physicians realize that they are responsible for the actions of their office staff and those who are directly controlled or mployed by those physicians. Vicarious liability is a term used to describe the imputation of neglect to another person not directly involved. Generally, the common law test is determined by the direction or control of another’s actions.

Typically, a physician is an employee of their individual corporation or professional corporation, which makes the corporation vicariously liable for the acts of the physician and non -physician employees: much like the responsibility a parent has for their child.

This transfer of liability makes it critical that practices, regardless of structure and asset amount, have protection against lawsuits made against the corporation or entity.

Although an entity is not a person, it is run by people. Therefore, if an employee injures another, the employee as well as the entity is responsible provided that the employee was operating within the scope of employment. *It is important to note that injury can include not only bodily injury or property injury, but also personal injury; for example, infliction of emotional distress.

Business Owners policies are written with the corporation as the named insured, which covers the vicarious exposure. Professional Liability policies are often written in a physician’s name and the entity must be added by endorsement.

If you have an entity, corporation, or multiple corporations it is important that you verify coverage with your agent or carrier. There are many ways to cover vicarious liability, so we encourage you to discuss the options with your agent by calling u at 770.399.6760.