Policyholder Services

What happens to my solo corporation’s coverage if my employed physician becomes a shareholder?

A change in structure from a sole shareholder corporation to a multi-shareholder corporation creates new liability exposures. Shareholders may be held vicariously liable for the acts or omissions of other members of the practice, even if they were not personally involved in the care of a patient. They also may be directly liable for decisions they make and services they render in their capacity as shareholders. Because of the different exposures that exist for such corporations, OMIC underwrites and rates multi-shareholders differently than we do for sole shareholder corporations.

While OMIC frequently is able to continue insuring entities following ownership changes, the entity’s eligibility for continued coverage is subject to underwriting review and approval. OMIC will evaluate the percentage of ownership held by OMIC insureds vs. those insured elsewhere and the coverage and claims experience of the new shareholders, among other factors. If new articles of incorporation are filed as a result of the change in ownership, thus creating a new entity, coverage will not exist until the entity is specifically named on the declarations page.

To ensure that you and your entity are covered for your professional liability exposures, please notify us promptly if any changes in ownership or corporate status occur.