Vicarious liability is the responsibility of a superior for acts committed by a subordinate. As a dentist or dental practice owner, if your employee causes harm through an error or through negligence, you can be held liable for their mistake and named in a claim or lawsuit. There is no insurance coverage type called “vicarious liability.” Instead, it is a type of risk that can occur in a variety of situations. Therefore, there are a variety of insurance coverages that respond to different types of vicarious risk. The challenge is that vicarious liability is often an invisible risk, so it is important to have regular or in-depth conversations with your insurance agent or broker. They can help you identify vulnerabilities in your practice that you may not see. When Might a Dentist Experience a VL Exposure? In malpractice, there are a number of ways you can open yourself to a vicarious liability claim. Some of these include: Creating a corporate entity Opening a practice Hiring associate dentists as employees or contractors Bringing a specialist to your office, such as an anesthesiologist or oral surgeon Creating a corporate entity, even if you are a sole practitioner: If you are an independent contractor who works on a 1099 basis, chances are your accountant has suggested that you form a corporate entity to be paid through, for the tax benefits, instead of accepting payment as an individual (E.g. Jane M. Doe DDS LLC). If you have an incident with a patient during clinical care that leads to a malpractice claim or lawsuit, the chances are good that the plaintiff’s representation will name your corporate entity in the action in addition to yourself. If you do not have insurance coverage for that corporate entity, your malpractice policy will respond to your defense but will not respond to defend the corporation, and you will experience a gap in coverage. Fortunately, this type of gap is easy to close. Most insurance companies have the ability to add Shared Limits Entity Coverage to your individual malpractice policy with little or no additional premium. That is because, in this scenario, the corporate entity and the doctor are basically one in the same. “Shared Limits” means that the per-occurrence and aggregate limits of liability found in your policy will extend over yourself and your corporation. Opening a practice where you employ dental assistants and hygienists: As soon as you open your own dental practice, you run the risk of a vicarious liability. Any dental assistant, hygienist, or dental technician treating patients is doing so under your supervision. If they have an incident, you are liable. If you are the only doctor practicing in your office, the Shared Limits on your malpractice policy may suffice. However, if you have associate dentists working with you, Shared Limits will not be enough. In this case, you will need a separate Entity Policy . More on this in the next section. Bringing on other associate dentists as employees or contractors: An Entity Policy is essentially a malpractice policy for your corporation. It covers your practice for the actions of the doctors working there. In this scenario, you would carry your own malpractice. You would also carry the Entity Policy that defends the corporation. And each of your associates would carry their own individual malpractice policies. This is key. An Entity Policy covers your practice for the actions of the doctors working there, but it does not cover those doctors. They still need to maintain their own malpractice coverage. The premium cost for a separate Entity Policy would be about 10% of the cost of your individual malpractice premium. When a specialist treats patients at your office: Many dentists believe that, when they have an outside specialist visit the office, such as an anesthesiologist or oral surgeon, that specialist is responsible for their own malpractice, and leave it at that. However, just because a visiting specialist is not your employee, that does not mean you cannot be held responsible for their actions. When that specialist attends to your patient, it is understood that they are doing so at your request and within a course of treatment you have prescribed. If you work with an attorney or dental consultant, they may advise you to have all your associates, contractors, and specialists add your practice to their own individual malpractice policies as an Additional Insured . This advice is part of a movement within the dental sphere to push risk downstream. The argument here is: if your employee or contractor makes a mistake, why shouldn’t they be held liability instead of yourself? With the Additional Insured provision, their policy would respond to your practice’s defense if they make an error. However, while helpful, there are several limitations to this approach: The Additional Insured provision puts the onus on the employee to defend the owner, which many associates consider an unfair re-distribution of the risk. If you rely on this strategy, you are also relying on your employee to open the claim. It’s not your policy, so you cannot do it yourself. Yes, you may have some protections, but you are also relinquishing control of your own defense. Even if your employee adds you as an Additional Insured, that may not prevent you from being named in a claim or lawsuit. Why run the risk of having a gap in coverage when you can take steps to help ensure your own defense? Consider a Group Policy. If you are a practice owner with associates, employees, and specialists, you may want to consider a Group Policy . This option tends to provide the most comprehensive coverage for a practice with multiple doctors. In this scenario, a majority of the doctors at your office would work with a single insurance company, and each would carry comparable coverage with the same limits. The corporation would also have its own Entity Policy. There is no need for an Additional Insured provision. Your risk is diminished because everyone’s coverage is uniform, and everyone has their own individual limits of liability (including the corporation) without having to share. Other Vicarious Liability Risks Faced by Practice Owners Practice owners can face vicarious liability risks from other angles besides malpractice, including some of the following: An employee uses their personal vehicle to run a work-related errand and has a car accident. That employee is operating within their job duties; therefore you may be held liable. If your Business Owner’s Policy includes Hired and Non-Owned Auto coverage , your practice would be covered if named in a lawsuit due to that employee’s accident. It’s important to note that your Business Owner’s Policy would not defend the employee. They still need to carry their own personal auto policy An employee gets into an altercation with, or bullies, a stranger while wearing a shirt with your practice logo on it. In a legal action, an attorney would be only too glad to claim you have liability for the violator’s actions. As a business owner, you are a juicy target (far more than one individual employee). The liability coverage inside your Business Owner’s Policy may respond to your defense. An employee uses a photograph they found on the internet in your marketing materials or on your website, only to discover that it is owned by a stock photo company. That stock photo company then sues your practice for Copyright Infringement. The employee made an error while working within the scope of their employment, therefore you are liable. The liability coverage inside your Business Owner’s Policy may respond to your defense. If you have any questions or concerns about your coverage, or if this article has exposed a vicarious liability risk that you are facing, now is the time to contact your agent for their assistance. They want to help you. And your insurance company wants you to avoid gaps in coverage. Written by: Eric Harper