Indemnification clause: please help..

[Psych25]

Indemnification clause: what are your thoughts on having this in a contract?

My understanding is that it puts me at huge risk for liability and malpractice does not typically cover this.

How would I get it removed? If they refuse, is it worth the risk signing?

Also, any other ways to protect self if one is included in a signed contract? Ie other types of insurance

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[calvnandhobbs68]

Indemnification clause: what are your thoughts on having this in a contract?

My understanding is that it puts me at huge risk for liability and malpractice does not typically cover this.

How would I get it removed? If they refuse, is it worth the risk signing?

Also, any other ways to protect self if one is included in a signed contract? Ie other types of insurance

You mean like a "hold harmless" clause? Yeah, any attorney is going to tell you to get rid of that. I mean, people are free to put whatever they want into contracts, your major recourse is walking away from the contract. The kind of vague and "**** you" stuff they put in academic contracts is hilarious, yet people sign them all the time. You get it removed by telling them you want it removed due to the liability it could open you up to, they're also free to refuse to do so and then you have to decide what you want to do.

What we did for my contract was make it a mutual "hold harmless" clause. So the wording is something like:

"Each Party agrees to defend, indemnify and hold the other party harmless from any and all claims, demands...blah blah blah..."

 

[nexus73]

1. I would ask a lawyer.
2. From what I’ve read I would never sign a contract with indemnification clause.

 

[Fan_of_Meehl]

You mean like a "hold harmless" clause? Yeah, any attorney is going to tell you to get rid of that. I mean, people are free to put whatever they want into contracts, your major recourse is walking away from the contract. The kind of vague and "**** you" stuff they put in academic contracts is hilarious, yet people sign them all the time. You get it removed by telling them you want it removed due to the liability it could open you up to, they're also free to refuse to do so and then you have to decide what you want to do.

What we did for my contract was make it a mutual "hold harmless" clause so you basically share the liability for each other not representing things correctly in the contract. So the wording is something like:

"Each Party agrees to defend, indemnify and hold the other party harmless from any and all claims, demands...blah blah blah..."

I think this is a quality post...I'm just laughing at the last part,

"Each Party agrees to defend, indemnify and hold the other party harmless from any and all claims, demands...blah blah blah..."

I don't know why it makes me chuckle. Maybe because of the utter pointlessness of it. In my mind's eye I can see the parties putting this phrase down on paper and then...over the next 10-15 seconds watch it slowly fade into non-existence (leaving only the blank page where the words once stood). 'We both agree that, whatever happens in the future, we're not going to point the finger at the other.'

yeah...right, lol

 

[TexasPhysician]

I don’t sign one sided indemnification clauses ever. I will sign mutual indemnification clauses if the other party isn’t large/powerful.

My thoughts only (not legal advice). Talk to your attorney. If I’m joining a local private practice, the odds that someone sues the practice for my actions, wins, and doesn’t sue me at the same time is very low. No attorney wants to take a case where the client excludes the person that is most at fault. My understanding is that attorneys will sue everyone and the courts will work out who is to blame or what percent of blame each party has. I’m ok with that and accept mutual indemnification here. Neither of us have tons of assets.

The problem is that the risk to me is higher with larger companies. Let’s pretend I get a contract from Pfizer. Now the odds of some attorney agreeing to exclude me from the lawsuit and directly hitting Pfizer is quite possible. Pfizer could lose a 50 million dollar lawsuit, survive, and then hire the best attorneys to try and pin it on me.

It is not close to equal or fair in my opinion for little old me to indemnify all of Pfizer even if they indemnify me. If Pfizer wants me bad enough, they will drop that clause. All hypotheticals. Pfizer is just a company I chose that most will recognize.

 

[Psych25]

Thank you all for your input. I did speak with my attorney, and he feels it is best to have it removed. It is a large corporation and scares me to have that liability.

My understanding is that mutual clauses usually do not hold up well and puts me at high risk still.

Ultimately, I am leaning towards walking away if this clause isn't removed.

 

[calvnandhobbs68]

It is not close to equal or fair in my opinion for little old me to indemnify all of Pfizer even if they indemnify me. If Pfizer wants me bad enough, they will drop that clause. All hypotheticals. Pfizer is just a company I chose that most will recognize.

yeah totally agree in my case it's with a fairly local private practice with a couple offices so a lot less one sided than a large corp

Thank you all for your input. I did speak with my attorney, and he feels it is best to have it removed. It is a large corporation and scares me to have that liability.

My understanding is that mutual clauses usually do not hold up well and puts me at high risk still.

Ultimately, I am leaning towards walking away if this clause isn't removed.

Yes mutual clauses still put you at risk but they essentially put you more towards "equal" risk and in real life would probably just end up with both people countersuing each other ridiculously. So yeah, like mentioned above, the big issue there is if one party has way more resources than another party.

 

[comp1]

Please remember your worth and that you are needed pretty much everywhere. There are certain places, like the government, that can't make changes, but private companies can. They want you and they will likely strike it. I also kinda doubt it's legally enforceable regardless and they probably know that. I don't think you can agree to something just saying, "sure you can break the law and I'll just take all blame for it" and then have a judge not throw that out immediately if anything does come before them.

 

[nexus73]

I wouldn't feel comfortable even with a small entity. If you are accused of negligence and the patient sues you and targets the clinic as well, and say the clinic has to spend $150K defending themselves, they will come after you for that, and you have no insurance coverage for indemnification so will have to pay that out of your own assets. What if it's $800K?

What if the clinic has a strong case that is easily defensible, but decides to settle for $500K to make the case go away, after all they know you are on the hook to indemnify them so why not just pay out? Then the clinic's insurance is going to come after you for that money. Now it's not a small clinic, it's a huge insurance corporation. You are screwed if this happens. Even if you have a good reason to argue you shouldn't owe the money, you're still out of pocket for your own attorney to fight that case for you. I see nothing but HUGE negatives with indemnification clauses.

IMO, this is why we all have insurance, the doctor, the clinic. If the clinic is in business of contracting/hiring doctors, the risk of liability exposure vicariously is part of the deal. Trying to shift that risk to the doctor is complete and utter horse excrement.

 

[calvnandhobbs68]

I wouldn't feel comfortable even with a small entity. If you are accused of negligence and the patient sues you and targets the clinic as well, and say the clinic has to spend $150K defending themselves, they will come after you for that, and you have no insurance coverage for indemnification so will have to pay that out of your own assets. What if it's $800K?

What if the clinic has a strong case that is easily defensible, but decides to settle for $500K to make the case go away, after all they know you are on the hook to indemnify them so why not just pay out? Then the clinic's insurance is going to come after you for that money. Now it's not a small clinic, it's a huge insurance corporation. You are screwed if this happens. Even if you have a good reason to argue you shouldn't owe the money, you're still out of pocket for your own attorney to fight that case for you. I see nothing but HUGE negatives with indemnification clauses.

IMO, this is why we all have insurance, the doctor, the clinic. If the clinic is in business of contracting/hiring doctors, the risk of liability exposure vicariously is part of the deal. Trying to shift that risk to the doctor is complete and utter horse excrement.

Correct but again it depends on contract to contact, this is why just generally go with what your lawyer is telling you. The overly broad ones just generally throw out. Mine is only for "losses which may arise from or are materially related to any breach by each party of any of the representations contained in this agreement".

So essentially only if either of us breaches the contract, not the more general "any way related to provision of medical care" or whatever.

 

[PsyDr]

1) Ask for consideration for this clause. Consideration can come in the forms including increased money, or payment for your own malpractice insurance.
2) You can also ask for a cap on indemnity.
3) Be aware, that standard employment contracts include things like an agreement that you will practice within the standard of care. This is very important. If you are sued for malpractice, it will likely be for some form of violating the standards of care. Your employer can turn around and say, "Dr X was not practicing in accordance with his/her employment contract, and therefore they are on their own."

 

[Psych25]

I just received this updated version

Physician (“Indemnitor”) agrees to indemnify and hold harmless Employer, its Affiliates and each of their shareholders, directors, officers, employees, and agents (“Indemnified Party”) from and against any and all losses, claims, damages, actions, liabilities, costs and expenses (including reasonable attorney’s fees and expenses related to the defense of any claim), which arises due to the gross negligence or willful misconduct or violation of applicable law of Indemnitor or his/her agents.

Does the "his/her agents" mean nursing staff?

Ideally I would like the clause removed, but I'm told it can't be. Is this safe to sign as is? I'm getting mixed responses. My lawyer said it is and that malpractice wouldn't cover gross negligence or willfull misconduct anyways.

 

[comp1]

I'm not sure you should trust any of us more than your lawyer, but I would agree that if you just start stabbing people randomly at your site of work, you're likely going to be liable regardless of this contract.

 

[michaelrack]

Does the "his/her agents" mean nursing staff?

No. For private psychiatrists (non-W2 employees), agents would include nurse practitioners that work for you or your group. Many of the inpatient psychiatrists in my area alternate with nurse practitioners in seeing patients (the doc might see patients mon, wed, fri at one hospital; and tues/thur/sat at another- with the NP seeing patients on days that the psychiatrist isn't).

 

[dl2dp2]

Gross negligence indemnification is common and standard. this means that if you sexually molested a patient, and the patient sued you and the clinic, you would not subsequently sue the clinic yourself. However, this doesn't indemnify the patient from suing the clinic for negligence of not managing you. I think if you refuse to sign this the clinic would suspect you are at high likelihood of gross misconduct and think they dodged a bullet.

 

[Psych25]

Gross negligence indemnification is common and standard. this means that if you sexually molested a patient, and the patient sued you and the clinic, you would not subsequently sue the clinic yourself. However, this doesn't indemnify the patient from suing the clinic for negligence of not managing you. I think if you refuse to sign this the clinic would suspect you are at high likelihood of gross misconduct and think they dodged a bullet.

My concern would be, lets say the hospital gets sued and I'm the only psychiatrist on staff, that I would be listed on the lawsuit. I would be responsible for seeing all new pts that come through the door and then they get split among NPs that work there, who continue following them. So my name is listed on all pts at some point. This is in a state that NPs don't need direct supervision. My concern would be, lets say the hospital gets sued and I'm the only psychiatrist on staff, that I would be listed on the lawsuit. The "his or her agents" is confusing and my lawyer wasn't able to provide much insight other than, if they are underneath me (such as nurses, NPs) and working with them, then they could argue they are my agents. So if the NP or nurse makes a mistake, I am responsible (say they give a patient that the chart says they are allergic to). It feels like this is a lot of liability.

 

[Psych25]

No. For private psychiatrists (non-W2 employees), agents would include nurse practitioners that work for you or your group. Many of the inpatient psychiatrists in my area alternate with nurse practitioners in seeing patients (the doc might see patients mon, wed, fri at one hospital; and tues/thur/sat at another- with the NP seeing patients on days that the psychiatrist isn't).

This is a inpatient W2 position with no NP working directly with me. They take over certain patients after I've done initial eval

 

[Candidate2017]

Legally (and theoretically), one sided indemnification clauses are bad, and your lawyer is committing malpractice if they do not recommend removal or modification.

But practically, you have little say if you want to take up the yoke of employment for The Man. Plus, as an employee there are many unwanted responsibilities, not addressed in your contract, which The Man can impose for which your only recourse is quitting. This is one of the biggest risks of being an employee. But the risk of a hospital getting lawyers to sue you under an indemnification clause is infinitely low. There is no benefit to a large system wasting time and money on a lawsuit that will put you into bankruptcy. (BTW, have you ever requested a copy and actually read ALL of your insurance policies? Do you even know what your car, homeowner's, disability, and malpractice policies exclude?)

If the balance of power were closer to equal, for example, negotiating a contract to work for a psychiatrist's private practice, then the indemnification clause absolutely must go. This is because the likelihood of you getting sued by a business owner over some random conflict is much, much higher than being sued by a business. Humans are emotional, large institutions are not.

It's ironic that psychiatrists, despite some training in statistics and psychology, continue to overestimate mostly irrelevant risks while underestimating larger financial risks such as divorce. Insurance companies are happy to insure OB-GYNs, teen drivers, and bars, but I haven't heard of any insuring against divorce. I wonder why.

So if the NP or nurse makes a mistake, I am responsible (say they give a patient that the chart says they are allergic to). It feels like this is a lot of liability.

The hospital will be sued if an NP or nurse makes a mistake because the hospital is the employer. You will also be sued because... doctor. The hospital has its own insurance, with a much larger limit than your med mal limits. Again, the hospital and its insurance company has no interest or benefit in suing you and waiting for a payout, if any, from your bankruptcy.

 

[calvnandhobbs68]

The "his or her agents" is confusing and my lawyer wasn't able to provide much insight other than, if they are underneath me (such as nurses, NPs) and working with them, then they could argue they are my agents. So if the NP or nurse makes a mistake, I am responsible (say they give a patient that the chart says they are allergic to). It feels like this is a lot of liability.

Man your lawyer is not being much help here. I mean I'm obviously not a lawyer but theoretically you could adjust the wording so it would be clear only your direct employees or contractors working under you would be liable.

So, for instance, something along the lines of:

"which arises due to the gross negligence or willful misconduct or violation of applicable law of Indemnitor or his/her employees or subcontractors"

If the hospital has some issue with some sort of change like that, then you may bring up the issue of WHY they would have that issue and what other "agents" would they be thinking of putting you on hook for if they aren't directly employed or contracted by you?

You could also then bring up the point that you aren't comfortable assuming liability for any person who you don't have a formal contractual relationship with (just like them....).

 

[Psych25]

Man your lawyer is not being much help here. I mean I'm obviously not a lawyer but theoretically you could adjust the wording so it would be clear only your direct employees or contractors working under you would be liable.

So, for instance, something along the lines of:

"which arises due to the gross negligence or willful misconduct or violation of applicable law of Indemnitor or his/her employees or subcontractors"

If the hospital has some issue with some sort of change like that, then you may bring up the issue of WHY they would have that issue and what other "agents" would they be thinking of putting you on hook for if they aren't directly employed or contracted by you?

You could also then bring up the point that you aren't comfortable assuming liability for any person who you don't have a formal contractual relationship with (just like them....).

I really appreciate it! Seems like a smart way to approach it.

 

[dl2dp2]

My concern would be, lets say the hospital gets sued and I'm the only psychiatrist on staff, that I would be listed on the lawsuit. I would be responsible for seeing all new pts that come through the door and then they get split among NPs that work there, who continue following them. So my name is listed on all pts at some point. This is in a state that NPs don't need direct supervision. My concern would be, lets say the hospital gets sued and I'm the only psychiatrist on staff, that I would be listed on the lawsuit. The "his or her agents" is confusing and my lawyer wasn't able to provide much insight other than, if they are underneath me (such as nurses, NPs) and working with them, then they could argue they are my agents. So if the NP or nurse makes a mistake, I am responsible (say they give a patient that the chart says they are allergic to). It feels like this is a lot of liability.

Hate to be psychodynamic shrinky here, but you have a lot of "concerns" about legal minutiae which tells me that you don't particularly like the job itself. Maybe look elsewhere? I've seen gross misconduct indemnification in almost every single one of my contracts and they've never bothered me. There's the ambiguity of "his agents", but this would be litigated if there's ever a lawsuit anyway. Granted, most of my contracts I don't really do item-by-item negotiation since the counterparty usually takes it or leaves it. There are also very specific legal exclusions that apply specifically to hospitals. I suspect your chance of leaving this job very quickly after signing is high.

 

[Psych25]

Hate to be psychodynamic shrinky here, but you have a lot of "concerns" about legal minutiae which tells me that you don't particularly like the job itself. Maybe look elsewhere? I've seen gross misconduct indemnification in almost every single one of my contracts and they've never bothered me. There's the ambiguity of "his agents", but this would be litigated if there's ever a lawsuit anyway. Granted, most of my contracts I don't really do item-by-item negotiation since the counterparty usually takes it or leaves it. There are also very specific legal exclusions that apply specifically to hospitals. I suspect your chance of leaving this job very quickly after signing is high.

I am a current 4th year resident. The position itself seems like an ideal scenario. I was told by my program director as well as other psychiatrist in the area that they would never sign a clause like that. I think it scared me more than anything, and I am looking for more input. My lawyer didn't help much with his vagueness. I just don't want to be sued for something that is completely out of my control. ie a nurse is brand-new and doesn't she/he doesn't know what they are doing. You're saying I would have a strong argument if something like that was brought to court? (the his or her agents piece)

 

[dl2dp2]

I am a current 4th year resident. The position itself seems like an ideal scenario. I was told by my program director as well as other psychiatrist in the area that they would never sign a clause like that. I think it scared me more than anything, and I am looking for more input. My lawyer didn't help much with his vagueness. I just don't want to be sued for something that is completely out of my control. ie a nurse is brand-new and doesn't she/he doesn't know what they are doing. You're saying I would have a strong argument if something like that was brought to court? (the his or her agents piece)

It's Jan. Get another offer to compare. There are plenty of jobs, especially inpatient.

Here is what I would do. Drag it out. Just tell the other side that you are evaluating the contract further with legal assistance. And then just delay. In the meantime, get another job offer and compare. If this is the best job you can get, go back and try to negotiate that "his or her agent" piece out. Otherwise, they are playing psychological games and you just get increasingly nervous in a position of less power. There's no need for any of that.

 

[calvnandhobbs68]

Gross negligence indemnification is common and standard. this means that if you sexually molested a patient, and the patient sued you and the clinic, you would not subsequently sue the clinic yourself. However, this doesn't indemnify the patient from suing the clinic for negligence of not managing you. I think if you refuse to sign this the clinic would suspect you are at high likelihood of gross misconduct and think they dodged a bullet.

Legally (and theoretically), one sided indemnification clauses are bad, and your lawyer is committing malpractice if they do not recommend removal or modification.
But the risk of a hospital getting lawyers to sue you under an indemnification clause is infinitely low. There is no benefit to a large system wasting time and money on a lawsuit that will put you into bankruptcy.

Wrong, that's not what this indemnification clause says. This says that the hospital can come after him for "any and all losses, claims, damages, actions, liabilities, costs and expenses (including reasonable attorney’s fees and expenses related to the defense of any claim), which arises due to the gross negligence or willful misconduct or violation of applicable law of Indemnitor or his/her agents."

So, say OP sexually molests someone at work. Patient sues the hospital and the clinic, alleging the clinic should have done a better job of supervising him to keep him from molesting people. Clinic eventually gets it thrown out or settles but runs up a 100K bill in the process. Clinic can now go back to this clause and say OP owes them 100K...sure you can trash your credit forever and try to claim this puts you into bankruptcy but now you run up a bunch of legal costs doing that and this may or may not work depending on how good your asset protection is. There's not much "effort" that goes into coming after OP it's right there in black and white.

Now extend this to the vague "any agents". There is very little downside to saying "I want this clarified because I totally get I should be responsible for my own negligence/misconduct but I don't want to be responsible for negligence for people I have no direct control or employment relationship with".

Doctors sign stupid contracts all the time, doesn't mean they even understand what they say. You should be going line by line through your contracts as they are legally binding documents you are signing that could have huge implications down the road. I see posts all the time by people on physician groups that are like "my employer just fired me without notice, can they do that?" or "my group is suing me" or "my group is taking money back from me, can they do that???" and they have no idea what the contract they signed years ago actually meant.

 

[Psych25]

I received clarification that it would extend only to people I hire to do notes or my work (ie NPs that I hire directly). Nurses would be hospital responsibility. I will not be having any "agents" unless I choose to hire someone to help me or supervise NPs, which I will not be doing. Thank you for all the feedback!