0:00

Employment agreement will additionally address

0:03

who is responsible for procuring

0:05

and paying for malpractice insurance.

0:08

In the employment relationship,

0:10

it is typically the employer's obligation to procure

0:14

and pay for this insurance, but it's not always the case.

0:16

So you need to understand at the outset

0:19

who's actually responsible for this cost.

0:21

There are two typical types of malpractice policies.

0:24

One is an occurrence based, the other's claims made.

0:28

Um, occurrence based coverage will cover you, uh,

0:31

for any claims that are made from the beginning

0:33

of the coverage period into the future.

0:36

Claims made is a little bit different.

0:38

It's like a term life insurance policy.

0:40

It will only cover malpractice claims

0:43

that are made while the policy is in effect

0:46

or during any tail period.

0:48

And so what you will typically see

0:51

is when there's a claims made, a malpractice policy,

0:54

there will be an obligation upon termination of employment

0:57

for one party or the other to pay for tail insurance.

1:02

The tail insurance cost, uh,

1:04

can vary very considerably across the country

1:06

and across carrier.

1:08

And you want to make sure

1:09

that when you are looking at the employment agreement,

1:12

you fully understand whether

1:13

or not there's gonna be a circumstance where you have to pay

1:16

for the cost of tail insurance.

1:18

When I'm representing an employee, I typically try to

1:21

to limit the obligations to pay for tail insurance

1:24

to circumstances where the employee's relationship has been

1:28

fired for cause

1:29

or the employee elects to leave without cause

1:32

and all other circumstances.

1:34

I want the employer to pay

1:35

for the cost of the tail insurance.

1:38

In addition to understanding the type of responsibility

1:41

and the type of policy, you wanna understand the level

1:44

of coverage that the policy will provide.

1:47

It is not uncommon for policies

1:50

to have a 1 million individual claim

1:53

or $3 million per annual aggregate coverage.

1:56

That's a fairly standard coverage,

1:58

but sometimes you see 2 million and 4 million

2:00

and sometimes in certain states that have enacted, um,

2:03

tort reform, you see much lower limits of coverage.

2:06

Uh, the last thing I wanna say about malpractice insurance

2:10

is that there are circumstances where

2:13

we've seen self-insurance models input in place.

2:16

And if you're working for a large academic institution

2:20

or you're working for a large organization that has

2:24

very large extensive operations, you may not be

2:26

as concerned about the fact

2:28

that the employers basically taking the

2:30

risk on the self-insurance.

2:32

But there have been other circumstances

2:33

where we've come across where it's a small group

2:36

that has enacted a self-insurance policy or or program,

2:40

and there's some considerable concerns about whether

2:43

or not the coverage, um, that's purported to be made, um,

2:46

will actually be there.

2:48

And so you don't come across self-insurance all that often,

2:51

uh, but if you are encounter that situation,

2:54

you definitely wanna work with counsel to understand

2:57

what your rights are and what

2:58

The gaps of coverage

2:59

that may be if there's a self-insurance relationship.

3:03

The final thing I wanna say about malpractice is

3:06

that you need to be careful about

3:08

any provisions in the employment agreement that obligate you

3:10

to indemnify the practice

3:13

or others for any medical negligence issues that arise

3:16

during the term of employment agreement.

3:18

In certain cases, the insurance companies will have made a

3:21

determination that if the employee is going to defend

3:25

and indemnify and hold the practice harmless,

3:27

that the insurance coverage which is being purchased

3:30

to protect against a known risk will be invalidated.

3:34

And so you need to be make careful

3:36

that the insurance coverage

3:38

that the practice maintains is not invalidated

3:40

because the employer's insisting upon the employee

3:44

indemnifying for medical negligence issues.