Policyholder Services

Do I have increased liability exposure if I lease my surgical equipment to other ophthalmologists?

When you lease or otherwise allow other physicians to use your surgical equipment, you may be exposed to additional liability risks.  These additional exposures, which are briefly addressed below, will be dependent upon your relationship with the other physicians and the services you provide. You may contact your underwriter to discuss your specific situation. We also encourage you to speak with your own personal counsel when entering into agreements to lease or allow others to utilize your surgical equipment and/or staff.

 If there is a formal lease agreement between the parties and the lessor is not providing other health-care related services under the agreement, the liability should, at least theoretically, be limited to those in a typical lessor/lessee relationship. These include general negligence exposures, such as failure to inspect equipment, failure to deliver operating manuals to the lessee, or failure to warn the lessee of equipment defects, and product liability exposures.  These exposures are most often covered under a commercial general liability or business owners policy and are typically excluded under medical professional liability policies, such as OMIC’s.

When the lessee’s physicians use the space and/or equipment concurrently with the lessor’s physicians, if the lessor extends services beyond that of a typical landlord/lessor (for example, credentialing utilizers or operating the equipment on behalf of the lessee), or if there is no formal lease agreement between the parties, additional liability exposures may exist. These exposures depend upon the services provided and how the situation is perceived by patients. This liability may fall under the scope of professional liability as direct patient treatment or vicarious liability for the direct patient treatment by others.  If there is no formal lease agreement and the outside utilizers are given open access to the owner’s space and equipment, or when a lease agreement provides for the lessor to perform services outside the role of a typical landlord/lessor, please contact your underwriting representative. OMIC would treat these types of arrangements as “outpatient surgical facilities (OSFs).” Subject to underwriting review, compliance with OMIC’s OSF requirements, and payment of any applicable premium, coverage may be extended to the OSF for its direct and vicarious liability arising from the professional services rendered.

Regardless whether a formal lease agreement exists, OMIC recommends that the practice confirm that any individual who will utilize the insured’s equipment maintain the appropriate insurance coverage at adequate limits of liability.