We are frequently asked questions about the implications of a managed care company requiring or requesting a practitioner to sign a "hold harmless" contract; that is, a contract stating that if the company is sued by a patient for the actions of the provider, then the provider's insurance will indemnify the company. There are several important issues that the psychologist needs to consider when making a decision about signing this type of agreement. We have compiled a list of the most frequently asked questions along with our answers in an attempt to shed light on this subject.
Q. What is the impact on my insurance purchased through The Trust if I sign a hold harmless contract?
A. There is no change in your coverage brought about by signing a hold harmless agreement. You are still covered for your acts or omissions under the terms of your policy.
Q. I have heard that some hold harmless agreements are so broad that they may result in liabilities not covered by my policy. Is this true and how can I protect myself from these risks?
A. Yes, it is true. That is why it is always advisable to consult with an attorney prior to signing any hold harmless contract.
Q. Could you give an example of something that might not be covered?
A. Your policy protects you from claims arising out of your actions and/or the actions of your employees. If you have signed an agreement assuming the liability for the actions of others, your policy will not pick up their liability.
Q. Does this mean that I would not have coverage in this example?
A. No, you would have protection for claims arising from the actions of you or your employees, but not for those of non-employees.
Q. I have heard that signing a hold harmless agreement may reduce my liability protection, Is that so?
A. If a settlement against you is made by your insurance company and if they also pay as a result of your hold harmless commitment, both sums will come from your policy limits.
Please note that without seeing the specific allegations in a liability dispute, it is not possible to ascertain whether those allegations would be covered by your insurance policy.
Good risk management procedures suggest that you should not sign a hold harmless agreement that makes you responsible for the actions of anyone other than yourself or your direct employees. It is also highly recommended that you obtain legal advice before signing any agreements. If you have any questions on this issue, please call The Trust at 1-800-477-1200 or the plan administrator, TRMS at 1-877-637-9700.
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