There are distinct differences between Medical Malpractice insurance for Medical Providers and Managed Care Errors and Omissions (Professional Liability) and Directors and Officers insurance.

Malpractice Insurance applies to the actual physician’s treatment of patients, whereas Managed Care E&O and D&O Insurance provide a distinct and separate layer of insurance for exposures that may occur in association with the business activities related to managed care operations.

At times there may be cases where a medical malpractice suit not only names a physician or hospital, but goes on to name a managed care organization such as an IPA or HMO. This spread of risk is often referred to as “Vicarious” liability and is one of the main reasons why such organizations must carry Managed Care Professional Liability insurance or Errors and Omissions.

• Vicarious Liability is defined as: When one person is liable for the negligent actions of another person, even though the first person was not directly responsible for the injury. For instance, a parent sometimes can be vicariously liable for the harmful acts of a child, an employer sometimes can be vicariously liable for the acts of a worker, and a managed care organization can sometimes be vicariously liable for the acts of a contracted provider. In all of these cases the party causing the tort is seen as under the third parties control.

In the above scenario, a Medical Malpractice policy would respond for the physician or medical facility named in the suit and the Managed Care Insurance policy would respond for the managed care organization.

Note: HCP is not a law firm and we are not giving legal advice, or defining coverage; your insurance policy is the final authority. HCP National is a Medical Malpractice Insurance and Managed Care E&O and D&O Insurance Company or broker.