This might seem like an easy question. If you are employed by a group, at a minimum you should know the carrier and understand what happens if you leave the group. If you are a shareholder or owner, you need to choose a quality carrier, choose coverage options, and decide how to allocate the premium among the group. If you are employed by an institution or hospital that is self-insured, you should know what to do if a claim is filed against you.
The following are important considerations to discuss before you join the group:
- Who provides the medical malpractice insurance coverage—the practice or you? Most likely it is the practice. Do you need to purchase retroactive coverage with the new company or tail coverage with the old?
- What happens if you are sued? You should be aware of the local attorneys retained to handle your case. Check to see if the company has the right to settle without your consent or if there is a “hammer clause”. Does the policy cover defense costs in addition to the limits of liability?
- What happens when you leave the group? Are you required to buy a tail? Who pays for it?
- What limits of liability does the group have? (You should have the same limits as everyone else and the prevailing limits based on your geographical area and your specialty.) Is it a claims-made or occurrence policy? (Most likely, it is a claims-made policy.)
- What company insures the group? In addition to premium considerations, you should also consider the company’s financial health, claims handling, and client service. It is a good practice to talk with a physician who has been involved with a claim with the carrier. Are risk management programs available to reduce the likelihood of a claim? What is the A.M. Best rating, which gives a picture of the solvency of the insurer?
- Be sure your insurance covers your full scope of clinical activities. If you are practicing part-time, (usually less than 20 hours a week), be sure you are receiving credit for it.
- If you are a practice owner or shareholder in the practice, be sure the coverage applies to your PA and your employees.
- If you are a small practice, you may want locum tenens coverage to be included. Many policies include locum tenens for a specific period of time, at no additional premium.
- If your insurance is with a trust or a captive, check to be sure it is not assessable, meaning the insuring entity has the right to assess you if losses are excessive.
While this is certainly not an exhaustive list of what to look out for in an employment agreement, it should help you get started. For any questions about employment agreements and for clarification of certain terms in your employment agreement, you should contact your employer and/or a qualified attorney in your area.