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What is Vicarious Liability?

Gallagher Healthcare :: Industry Insights
By Gallagher Healthcare | 7/17/2018

While hospitals have employees, increasing numbers of small practices and doctors are hiring advanced practice providers or independent contractors to help make their work more effective and to serve patients better. However, hiring contractors and APPs carries unique liability risks. If you have employees or independent workers, you will want to ensure you are protected.

What is Vicarious Liability?

The simplest vicarious liability definition is “liability for the actions of an employee or contractor.” In a medical setting, this may refer to situations when a patient experiences a negative medical outcome by working with one employee and files a lawsuit against the entire hospital. It may also refer to situations where a doctor hires an indecent contractor who makes a mistake and finds themselves targeted by legal action. In both types of vicarious liability examples, it may be the employee or contractor who behaved in an allegedly reckless way, but it will be the hospital or doctor who is held legally liable.

How Can You Reduce Vicarious Liability and Your Risk?

If you’d like to reduce your risk when hiring independent contractors or APPs, consider:

  • Carefully drafting and reviewing work and collaborative agreements which outline duties and tasks. In some cases, claims against APPs and the doctors who work from them occur when staff overstep their duties. It can be useful to work with a legal professional to draft a working agreement.
  • Clarifying staff and contractor roles and job titles. Customize job titles if needed so staff, contractors and patients understand who performs what role in your office. Have APPs wear a name tag and explain to patients their role in patient care.
  • Encouraging good communication. Written policies need to be in place which makes it clear to APPs and contractors when doctors should become involved. Frequent review and collaboration can ensure APPs get insight and the correct support from doctors. Make sure all independent contractors are clear on how and when communication and collaboration should happen.
  • Reviewing the system at least once a year. Use a yearly or bi-yearly review to go over job titles, duties, collaboration processes, communication procedures and more. Make adjustments as needed to ensure APPs have the correct support and are providing quality care without increasing the risk for you. Your yearly review should include a thorough review and update of any independent contractor agreements. As your practice or organization changes, your risks and your relationship with contractors will, too, so a review is important.

Where to Turn for Help

If you’re wondering who and what is vicariously liable or have questions about insurance solutions, contact Gallagher Healthcare for a quote. We help healthcare professionals in all settings find the insurance they need to provide the strongest protection possible. Gallagher Healthcare specializes in medical malpractice and professional liability solutions for medical professionals. We understand how to create custom solutions and how to find the coverage you need. Whether you already have APPs or are considering hiring APPs in the future, we can work with you to ensure your policy offers you maximum liability coverage.

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