Appeals Court Says Hospitals Can Be Liable for Doctors Without Malpractice Insurance

Posted on October 7, 2015 at 11:48am by

Photo of courtroomAccording to a recent New Jersey high court ruling, a patient whose surgeon improperly placed screws into his foot will not be able to sue because the surgeon did not have insurance. The court decided that doctors without malpractice insurance should be immune to civil lawsuits.

The court believes that the state medical board should be responsible for the discipline taken against uninsured doctors. However, the court did say that the hospitals and other healthcare facilities that employee these uninsured doctors can and should be liable if a plaintiff can prove that they did not do enough to ensure their physicians are insured or have a line of credit.

The victim recently went under the knife in 2005 for a spinal fusion procedure. Dr. Richard Kaul, a board certified anesthesiologist, elected to do the operation to treat the patient’s herniated lumbar disk. According to the court documents, the victim began experiencing ongoing pain in his foot following the surgery. It was discovered that Kaul had put screws into Jarrell’s foot and they were pinching the nerves.

The victim filed a lawsuit against Kaul for medical negligence. He was awarded $750,000 after winning the negligence case. The victim also filed suits against Kaul and the healthcare facility that employed him for misrepresentation because of Kaul’s lack of insurance, but because Kaul’s insurance specifically did not include spinal surgery, that suit was dismissed.

The New Jersey high court said that the law does not allow patients to sue healthcare systems for employing uninsured doctors. They also added that there is no law requiring that doctors tell potential patients that they did not have malpractice insurance.

However, a 2004 state law amendment does say that doctors are required to have either malpractice insurance or a line of credit for $500,000 or more. Doctors that have neither are supposedly subject to penalties from the State Medical Board.

The takeaway here is that healthcare systems are supposed to be doing their due diligence and making sure that the physicians they employ have insurance or a line of credit. If they do not do enough to ensure that, then they may be open to civil lawsuits.

Donald G. Targan & AssociatesAtlantic City medical malpractice attorneys


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