Photo Credit: Andrey Popov
Dr. MedLaw answers your questions regarding medical law, breaking down indemnification clauses in this article in response to a physician’s query.
Clinician: I’m looking for a private practice job after finishing my rheumatology fellowship. I was offered a contract that includes a section that says, “Practitioner shall indemnify, defend, and hold harmless Hospital, its affiliates, and their respective directors, officers, employees or agents, from and against all claims, causes of action, reasonable attorneys’ fees, and costs, arising out of, resulting from, or relating to the negligent operations, acts, or omissions of Practitioner or Practitioner’s employees, or agents.” Is this something to be concerned about?
Dr. MedLaw: This is an indemnification clause, which is increasingly a feature of medical employment contracts as practices and hospitals are consolidated into corporate entities and venture capital investors expand into healthcare. Thus, adversarial elements from business contracts are brought into medicine.
Indemnification as a legal concept means that one party agrees to reimburse another party for losses. A malpractice insurance contract is indemnification—the insurer did not harm the patient, they are still legally responsible for paying the damages on the doctor’s behalf, and the doctor pays them hefty premiums to take on that risk.
However, the clause you were presented with is a shifting of responsibility that you get nothing from but can pay a very high price for. If you are alleged to have committed malpractice, the hospital will be sued under vicarious liability because it is your employer. This clause, though, makes you liable to them for any money they must pay out under their legal duty as your employer. It is also so broadly worded that it could make you liable for what the hospital must pay if it is negligent because that is also “arising out of” and “relating to” a case based on your negligence.
This clause might just be boilerplate; an employer may be willing to strike it. However, such a clause in the contract is a concern, and an unwillingness to strike it at your request is a flashing neon warning that these are probably not people you want to work for.
Check out Dr. MedLaw‘s prior Q&A columns regarding navigating the complexities of a salary structure shift, and identifying an employment breach of contract!