Group Coverage & Vicarious Liability


Do you cover groups?

Yes, provided at least one member of the group is a psychologist.

Do I pay more for a group policy?

No. In most cases, a group policy costs less than purchasing individual policies. You can save at least 4%, depending on group size, when you purchase a group policy with at least two other owners or employees. Groups of 20 or more can save 10% or more. You can obtain additional discounts based on your group's eligibility and coverage.

Is it better to purchase a group or an individual policy?

If you are practicing in a group setting, it is better to purchase a group policy. The group policy covers you for everything that an individual policy covers. The group policy adds coverage for the group and protects you if you are sued for the actions of a colleague.

How do you define a group?

A group can be defined simply by public perception (that is, if the public perceives the entity as a group, it is a group), regardless of composition or size. Legal and tax definitions do not necessarily define a group.

Does it matter if I list my practice as a DBA (doing business as), a PC (professional corporation), or LLC (limited liability company) or partnership?

It does not matter. The Trust Professional Liability policy will cover you and all members of your group no matter what listing you use for your group structure. However, it is important that if you list yourself as a group, and have multiple health professionals delivering services under a group name, you must list everyone (excluding support staff such as clerical employees) under the same group policy. Additionally, if you are using multiple practice names, you must list them all on your application.

What if my practice changes?

Call The Trust whenever your practice changes. The Trust understands that groups may use multiple practice names and add or remove owners and employees over time. To be safe, make sure The Trust is aware of your latest changes, especially at renewal. You always want to avoid a claim against a practice name or person that you could have listed on the policy.

Must I pay every time I change the composition of my practice?

That depends on the change made. The Trust encourages you to keep your policy up-to-date for your protection. The Trust does not modify your premium mid policy-year if you add or remove employees or independent contractors. Owners and additional insureds are pro-rated from the time they are added or removed.

Must everyone in the group be on the same policy?

In order to provide complete coverage and avoid gaps in liability, we advise psychologists practicing in groups to list everyone on the same policy. Psychologists often worry that by listing their colleagues on the same policy, they will be liable for their colleague's actions. In truth, once psychologists practice together, they are already liable for one another's actions. By avoiding a group policy, the psychologists are actually assuming personal responsibility for the actions of others. Conversely, by purchasing a group policy, they are providing coverage for this exposure. You also create continuity in coverage. You can complicate your defense when colleagues are insured on different policies with different insurance companies.

Who may be listed on a group policy?

Once the group contains one psychologist, additional psychologists and “non-psychologists” may be added to the policy, provided a premium is paid for each individual. Other medical professionals, such as MD's or nurses, may be added at no cost with proof of their own coverage.

What is a non-psychologist?

A non-psychologist is a non-medical health professional who is not a psychologist. Examples include Social Workers, Counselors, Therapists and Psychology Nurses. Nurses and Medical Doctors should have a separate liability policy covering them for any medical services they provide.

How does The Trust cover secretaries and other administrative staff?

The Trust does not charge an additional premium for administrative staff. It is understood that many psychologists rely on support staff such as secretaries, filing assistants, answering services and billing services. Since support personnel are included on the policy, they are protected accordingly. However, the psychologist is still responsible for their actions and should ensure proper conduct.

What is an example of a medical professional?

Medical professionals typically involved in psychology practices include nurses and doctors with a doctoral degree in medicine (including psychiatrists).

How does coverage apply to psychiatrists and other medical doctors (MD's or DO's)? How does coverage apply to psychology nurses?

MD's may be named on your policy at no additional cost, whether they are an owner, employee or independent contractor. Simply provide current proof of coverage for that individual. Nurses may be added as non-psychologists. If they are providing medical services, they should also provide proof of their own coverage for those services.

What is the difference between office-sharing and a group?

Office-sharing involves a number of practitioners sharing the same offices without commingling their independent businesses. For example, one psychologist may use the office during the day, and another may use it at night. Office sharing relationships distinguish themselves from groups in that there is no distinguishable business relationship between the practitioners. 

In a group setting, psychologists involved in the group relationship have a stake in the business at large. That stake might include the sharing of profits, advertising, letterhead, support staff, clients, or a group name. IMPORTANT: A GROUP RELATIONSHIP IS DEFINED BY PUBLIC PERCEPTION, NOT BY THE PRACTITIONER AND CONTRACT RELATIONSHIPS HE OR SHE ENTERS! In this regard, many psychologists wrongly define their practice. In reality, a partnership exists by default and without official incorporation. Psychologists with individual coverage may not have sufficient coverage for this exposure. Including all group participants on a single group policy is the safest and least expensive option.

If I am an independent contractor or an employee of a group, do I need to list the group on my policy?

Independent contractors and employees have no ownership share in the business for which they work, and are not responsible for listing the group. However, by relying on the services of independent contractors and employees, the owner or employer can be held liable for their actions.

What is the difference between an employee and an independent contractor?

Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so, even when you give the employee freedom of action. What differentiates employee from independent contractor is the owner's or employer's right to control the details of how the services are performed. For more information please visit http://www.irs.gov/businesses and consult with an attorney.

What is the difference between listing someone as an employee and an independent contractor on my policy?

Employees are insured on your policy. If the employee is sued for actions taken as part of his or her employment, your group policy provides coverage. Generally speaking, employees do not need their own coverage for actions taken as part of your practice. 

The carrier requires that you list independent contractors on your policy so it can keep track of the additional exposure. The carrier also requires that we collect an additional premium for this exposure. Listing an independent contractor on your policy does not insure the independent contractor against lawsuits, and the contractor must maintain his or her own coverage. It is essential to keep up-to-date records of your contractor's coverage, because lack of coverage on the contractor's part will create additional exposure for you (examples of possible suits against you include improper supervision, employment, or other vicarious liability).

If my independent contractor does not have his or her own coverage, can I add them to my policy? Does it matter if they receive a 1099 tax form?

You can add anyone who works in your practice to your policy as an employee. Once they are listed as an employee, that person will be protected for the services they provide in the practice. Since The Trust cannot provide tax information, you should consult with your attorney or accountant to determine what the best tax/payment arrangement for your practice. Also remember that The Trust policy only responds to liability from the practice of psychology.

What is an additional insured?

An additional insured is a facility that the insured is indemnifying from his or her actions, when the actions are rendered on behalf of the facility. Example: a psychologist is an independent contractor for a small hospital. The hospital asks the psychologist to list the hospital as an additional insured on the psychologist's malpractice policy. The psychologist's policy would then protect the hospital in case the psychologist was negligent in the treatment of a patient referred by the hospital.

Who can be listed as an additional insured?

The carrier does limit the scope of who can be named as an additional insured. The carrier requires that the listing be as specific as possible. The carrier does not accept state governments or national groups, but will accept the name of a school. Note that the insured cannot have an ownership stake in any entity named as an additional insured.

When should I list an additional insured on my policy?

Only when listing the additional insured is required by contract.

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For more detailed answers, or if your question was not answered here, please call us at 1-800-477-1200.