Employment Agreements: Important Liability Considerations for Physicians and Hospitals

PRESCRIPTION OF THE MONTH

Charles Malmquist,
CPCU, ARM, AAI

770.912.1201

Paul Tuggle, CPCU

770.913.1208

Ron Cuen
770.912.1204

John Lowden

770.913.1209

Kevin Chojnacki
770.913.1213

Many experts agree that the future for health care will require more collaboration between hospitals, physicians, and other providers. This realignment and consolidation of providers comes in many forms, and requires many important considerations. Any change in an organization's or group's structure can also affect how the liability program is structured. There are multiple options for hospitals and physicians, and many new ones have been recently created by insurance carriers to adjust to the changing arena.

Whether you are considering physician employment, contracting, or creating another type of organization, the following are some of the important liability questions that hospitals and physicians should examine before finalizing an agreement.

- Who is responsible for obtaining the coverage & who pays the premium?

- Who selects the limits, the deductible (if only one is allowed)?

- Who is responsible for paying the deductible, if selected?

- Who has the right to cancel coverage, or make changes?

- Will the policy cover the physician for moonlighting?

- Who has the consent to settle, the group or individual physician?

- Who is responsible for buying the tail? Will anyone else contribute to the purchase of the tail?

- Can a physician opt to purchase prior acts coverage in lieu of a tail?

Please remember that it is important to seek the advice of a Healthcare Attorney and your Agent prior to entering into any employment agreement or contract. Your agent at Potter-Holden has important information on the multiple options for physicians and hospitals, and will be happy to review these options with you, or present to your group.

If you have any questions, please do not hesitate to contact an agent at Potter-Holden & Company at (770) 399- 6760.

Employment Agreements: Important
Considerations for Physicians and Hospitals

March 2006

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The information contained above is intended to be illustrative and discusses general insurance issues. It is not designed to give any specific legal advice pertaining to any specific circumstance. It is not intended as a policy of insurance, binder, or state of coverage or as an amendment, modification or waiver of the terms and conditions of any policy of insurance. In every instance, a policy is the only accepted statement of coverage, and it is important to read and understand your policy. Contact your agent if you have questions regarding your coverage.

All original content 2010 Potter-Holden & Company. No content may be copied, reproduced, published, and/or distributed without the express permission of Potter-Holden & Company.