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Indemnification clause and malpractice costs.

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  • Zaphod
    replied
    In the end it doesnt matter, if they do something terribly egregious and its their fault, they will pay and vice versa. Their malpractice would cover it anyway. You can write anything in a contract and people surely do, but that doesnt mean their enforceable or even reasonably in line with the law and how the world works.

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  • pulps
    replied
    Originally posted by sweetnpsycho View Post

    Why not just make the reciprocal clause the standard instead of having the employee ask?
    Good question. As an employee/IC, I do make it standard. One of the valuable lessons I’ve learned from my attorney over the years. I haven’t been on the employer side yet, but when I am, it will be standard too.

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  • Random1
    replied
    I'll bet if you read the contracts between yourself and a heatlh insurance plans that you participate with such as Aetna or United , they have similar clauses.

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  • sweetnpsycho
    replied
    Originally posted by pulps View Post
    There is no way I'd remove this if I were the practice, but I would gladly agree to a reciprocal clause if the employee asked.
    Why not just make the reciprocal clause the standard instead of having the employee ask?

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  • sweetnpsycho
    replied
    I usually aggressively negotiate the indemnification clause and have turned down jobs because of lack of compromise. Why have the clause if each party has their own insurance? Frankly, Contract Diagnostics is right in the interpretation of the clause.

    How aggressively do you negotiate the indemnification clause?

    Do you know any physicians who have gotten screwed because of the clause?

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  • GastroMastro
    replied
    Sounds like standard jargon.

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  • G
    replied
    Originally posted by orangecoat View Post
    I recently was presented with a contract for a position that included an indemnification clause:

    "Employee shall indemnify and hold harmless Group, its directors and officers, and its agents and employees, from any and all claims, causes of action, losses, liabilities, costs, and expenses, including attorney fees, related to or arising out of: (i) Employees acts or omissions within the scope of this agreement. (ii) Employees breach of the terms of this agreement."


    I hired Contract Diagnostics to review the contract and they stated that this isn't necessarily a red flag because they see it on about 50% of the contracts that they review and that only about 10% of the people who request it to be removed have it successfully removed.

    My main concern with this clause is that if I am sued by a patient (whether or not the suit is pursued), I would be held liable for paying for all legal fees and the payout to the patient, despite the employer having me under their malpractice policy and myself holding my own.

    The employer has declined to remove it, however, I was wondering if there is a clause that I could add so that I do not indemnify the group for any costs arising out of malpractice claims? Does anyone have experience with these clauses?

    Also, this job is practically my dream job that I have been trying to find for years. It checks every box I have and this is the only hangup.
    Congrats on the dream job. Do they provide you malpractice coverage? Never met anybody who knows somebody that had to pay an employer for a malpractice settlement.

    Since the employer won't remove it, sign and enjoy the new dream gig.

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  • Zaphod
    replied
    Originally posted by Random1 View Post
    Disclaimer , I am not a lawyer either

    If you get sued , they will go after your policy, maybe name the group you work for and also sue their policy , if they have a separate policy.

    You have a "hold harmless" in your contract. You cant go back and say I am not responsible for my own actions, my boss and company told me to do this , it is their fault. And hold the group responsible for your own actions unless the group did something willfully wrong.
    In which case, this clause doesnt protect them anyway.

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  • Random1
    replied
    Disclaimer , I am not a lawyer either

    If you get sued , they will go after your policy, maybe name the group you work for and also sue their policy , if they have a separate policy.

    You have a "hold harmless" in your contract. You cant go back and say I am not responsible for my own actions, my boss and company told me to do this , it is their fault. And hold the group responsible for your own actions unless the group did something willfully wrong.

    Leave a comment:


  • afan
    replied
    I am not a lawyer. You should ask a lawyer who practices in the field in your state.

    I don't see how this means that you would have to pay out of pocket if you were sued. That is what malpractice insurance is for.

    No matter what your contract says, the Group is going to have malpractice insurance because they would be totally crazy not to.

    But check it out with a lawyer who knows medical contracts in your state.

    Leave a comment:


  • Shant
    replied
    Something something no subrogation talk to your lawyer.

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  • CordMcNally
    replied
    Originally posted by orangecoat View Post


    I asked contract diagnostics: "Is me being sued for malpractice in the future a breach of contract such that if I am ever sued for malpractice I would have to indemnify the group and pay them damages?"

    To which they responded: "if they have to pay damages you would have to pay them back if they demanded indemnification." and "If you were to be sued by a patient for malpractice it would be under acts or omissions pursuant to the agreement. So if employer had to pay anything for such claim you would owe employer that money."


    I am concerned about the following situations happening in the future:

    1.) Patient sues me and it gets dropped, but the employer had to pay legal fees (outside of what malpractice plan covers) before the case was dropped.


    2.) Patient sues me and it ends up we settle for $100k. Group's malpractice pays $100k. Group requests I pay them $100k.

    I worry about the employer and/or malpractice insurer being able to request that I pay the full cost of the claim and/or fees and not just the out of pocket costs the employer has to pay (deductible, etc). The malpractice insurance would pay this, but in this clause I am indemnifying the group and "its agents and employees". I worry that this means that I have to cover the full cost of claims paid out by the malpractice insurance and not just the legal fees (deductibles, fees) paid by the employer outside of what the malpractice company covers?

    Having to pay the full cost of the claim to the employer/malpractice insurer would be a life-ruining situation (and would negate the entire point of malpractice insurance) while only having to cover the out of pocket costs for the employer would be a situation that is possible to recover from (10s of thousands of dollars paid to employer vs. 100's of thousands).
    I don't think that means you have to pay the employer whatever amount your malpractice carrier pays out. That makes zero sense anyway. I've never heard of this happening. You would think if it were in 50% of the contracts they see then you'd think there would be a lot of cases where this would be happening and I've never heard of one.

    Leave a comment:


  • pulps
    replied
    Congrats on finding your dream job. One clause in a contract is something that can be worked out, and I'm going to suggest you seek out a licensed and qualified attorney to provide you with appropriate legal advice to address your concern. I've never used Contract Diagnostics, but it does not appear that they are advertising themselves as providing legal advice from licensed attorneys (correct me if I'm wrong). To be very clear, I'm no attorney so this is not legal advice either.

    I have experience with such clauses, and I think a good attorney can propose a revision to the agreement that would keep the spirit of the indemnification intact while addressing your legitimate concerns.

    I like a balanced contract, and am okay with an indemnification clause as long as it is mutual. There is no way I'd remove this if I were the practice, but I would gladly agree to a reciprocal clause if the employee asked. If the practice wants you to take all responsibility if you screw up, why shouldn't you ask the same from them if they screw up? The last part of the clause below addresses your concern about responsibility to pay for any fees or damages that are compensated for by insurance. Good luck, and keep us posted.

    Something like this might work for you:

    Practice agrees to hold harmless and indemnify the employee from and against any and all liabilities, costs, damages, expenses, and reasonable attorneys’ fees resulting from or attributable to any and all of Practice’s negligent acts or omissions, including, but not limited to, any liability attributable to malpractice, a purported violation by Practice of a restrictive covenant or other agreement with a third-party, or billing fraud or compliance; provided, however, that Practice shall not be required to reimburse the employee for such liabilities, costs, damages, expenses, and reasonable attorneys’ fees to the extent such items are entirely compensated for by insurance.
    ​​​​​​​
    Employee agrees to hold harmless and indemnify the Practice from and against any and all liabilities, costs, damages, expenses, and reasonable attorneys’ fees resulting from or attributable to any and all of employee's negligent acts or omissions, including, but not limited to, any liability attributable to malpractice, a purported violation by employee of any agreement with a third-party, or billing fraud or compliance; provided, however, that employee shall not be required to reimburse the Practice for such liabilities, costs, damages, expenses, and reasonable attorneys’ fees to the extent such items are entirely compensated for by insurance.

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  • orangecoat
    replied
    Originally posted by ENT Doc View Post
    "Employee shall indemnify and hold harmless Group, its directors and officers, and its agents and employees"

    It means you aren't holding them responsible in any way. There should be a separate section covering malpractice you and how this is handled. This clause, to me, means that you aren't going to turn around and sue the group for something related to YOUR act or omission or breach of the agreement. If THEY do something improper you could still bring a lawsuit, presumably.

    I asked contract diagnostics: "Is me being sued for malpractice in the future a breach of contract such that if I am ever sued for malpractice I would have to indemnify the group and pay them damages?"

    To which they responded: "if they have to pay damages you would have to pay them back if they demanded indemnification." and "If you were to be sued by a patient for malpractice it would be under acts or omissions pursuant to the agreement. So if employer had to pay anything for such claim you would owe employer that money."


    I am concerned about the following situations happening in the future:

    1.) Patient sues me and it gets dropped, but the employer had to pay legal fees (outside of what malpractice plan covers) before the case was dropped.


    2.) Patient sues me and it ends up we settle for $100k. Group's malpractice pays $100k. Group requests I pay them $100k.

    I worry about the employer and/or malpractice insurer being able to request that I pay the full cost of the claim and/or fees and not just the out of pocket costs the employer has to pay (deductible, etc). The malpractice insurance would pay this, but in this clause I am indemnifying the group and "its agents and employees". I worry that this means that I have to cover the full cost of claims paid out by the malpractice insurance and not just the legal fees (deductibles, fees) paid by the employer outside of what the malpractice company covers?

    Having to pay the full cost of the claim to the employer/malpractice insurer would be a life-ruining situation (and would negate the entire point of malpractice insurance) while only having to cover the out of pocket costs for the employer would be a situation that is possible to recover from (10s of thousands of dollars paid to employer vs. 100's of thousands).

    Leave a comment:


  • ENT Doc
    replied
    "Employee shall indemnify and hold harmless Group, its directors and officers, and its agents and employees"

    It means you aren't holding them responsible in any way. There should be a separate section covering malpractice for you and how this is handled. This clause, to me, means that you aren't going to turn around and sue the group for something related to YOUR act or omission or breach of the agreement. If THEY do something improper you could still bring a lawsuit, presumably.
    Last edited by ENT Doc; 06-28-2021, 01:53 PM.

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