Philadelphia Medicine Summer 2018 - 24

p h i l a m e d s o c  .org

Feature continued

Malpractice Insurance
Most organizations that employ physicians provide professional
liability insurance as an employee benefit. The employment
agreement should always specify whether such insurance will
be "occurrence based" or "claims made." An occurrence-based
policy covers the physician for any alleged acts or omissions that
occurred while the policy was in effect, even if the claim is brought
after the policy expires. Claims made policies generally cover the
physician only if the claim is brought within the policy period.
When the policy period expires (usually when the physician leaves
the employment relationship), and if no claim has been brought,
the insurance company has no obligation to provide coverage if
a claim is made after expiration.
Extended reporting endorsement (i.e., "tail") coverage is
needed to cover claims made after the policy expires, for acts or
omissions committed during the period of the policy. Absent
an express obligation by the employer to purchase tail coverage,
physicians are generally liable for the cost thereof.

Restrictive Covenants
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24 Philadelphia Medicine : Summer 2018

The employment agreement will typically contain provisions
restricting the physician's use and disclosure of confidential and
proprietary information of the employer, including, without
limitation, the identity of the employer's patients, information
contained in the employer's patient and medical records, the
employer's charges for its services, terms of the employer's managed
care contracts, information regarding the employer's personnel,
methods of practice, business and financial information, and
the like.
Physician employment agreements often include restrictions
prohibiting the physician from engaging in certain activities in a
specified area and for a specified period after termination; these
latter types of restrictions may include a covenant not to compete
and/or non-solicitation covenants prohibiting the physician
from soliciting patients, referral sources and contractor/vendors
of the employer.
Non-compete provisions typically limit physicians from
practicing within certain geographic areas (based on a mileage
radius around one or more locations) for the term of the agreement
and for a period of time after the contract's termination. Most
states uphold non-compete restrictions that legitimately protect
an employer from unfair competition and that are reasonable in
geographic area and length of time.
Time restrictions of one to two years after the termination or
expiration of the agreement are usually upheld; the enforceability


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Table of Contents for the Digital Edition of Philadelphia Medicine Summer 2018

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