Hospital in Florida not liable for uninsured doctor

Florida doctors worried hospitals would require liability coverage if the court held institutions responsible. Trial lawyers say the ruling gives physicians incentive to go bare.

By Amy Lynn Sorrel, AMNews staff. June 18, 2007.

Florida physicians are waiting to see if some hospitals will ease their medical liability insurance requirements for staff doctors in light of a recent ruling.

The Florida Supreme Court in May decided that hospitals cannot be held liable for negligence by staff doctors who eschew state financial requirements by not carrying insurance or having money accessible to pay a medical liability judgment.

Florida law does not require doctors to carry medical liability insurance. When physicians do not carry insurance it is known as "going bare." But a statute requires physicians who hold hospital privileges to prove they can pay a minimum of $250,000 to cover a claim, whether through an escrow account or bank letter of credit, or agreeing to personally pay a claim within 60 days. About a dozen other states require doctors to obtain minimum levels of coverage through traditional liability insurance or a separate account to practice in the state or to qualify for liability reforms, according to American Medical Association research.

However, when an uninsured staff doctor at Plantation General Hospital in southern Florida fled the country, leaving behind an $859,000 verdict against him, the plaintiff in the case sued the hospital for $250,000 of the judgment. The patient argued that the hospital was responsible for ensuring its staff doctors complied with state requirements.

The high court unanimously disagreed. Although state law requires doctors to establish financial responsibility as a condition of having privileges, it does not require hospitals to enforce the mandate, justices said.