Coverage When Machines Malfunction

The 2019 No. 2 issue of the Digest explores equipment malfunction and patient injury - how to prevent it, what to do when it occurs, and professional liability claims that may result. Here we will look at how your OMIC policy covers you in such an event.

OMIC’s policy covers insureds for injury to a patient because of an act or error in their provision of direct patient treatment (i.e., direct liability) or direct patient treatment by someone for whom they are legally responsible (i.e., vicarious liability). An example is the case from the lead article where the patient was burned due to the insured physician igniting the drape with the cautery tip. This was user error, and is plainly covered under the OMIC medical professional liability insurance policy.

Sometimes the patient alleges both that the equipment was defective and that it was used improperly. OMIC’s policy specifically does not cover the defense of or pay any damages due to claims based on the manufacturing or assembling of a medical device. That is the responsibility of the device manufacturer, which should have its own insurance for just such claims. If medical negligence and products liability are both alleged against an insured, OMIC would defend the claim, but would reserve its right not to pay any damages due to products liability. This might occur where the cause of the injury is less clear, such as in the phaco disconnection claims described in the lead article.

The OMIC policy covers named ophthalmologists, named business entities like ASCs, named ODs and CRNAs, and the insured ophthalmologists’ and entities’ non-physician employees. While ophthalmologists are subject to direct liability for their errors in equipment usage, they also may be held vicariously liable for the actions of others. OMIC’s policy covers both. Vicarious liability could be due to employer liability, where the employer is legally responsible for the acts of its employees; captain of the ship theory (the doctor is the “captain” during a medical procedure so any mistakes by other providers in the care group are ultimately the captain’s responsibility); or, a similar theory where the physician is legally responsible for the actions of persons under his or her “direction or control.” Although the techs in the loose microkeratome case of the Closed Claim Study were not the ophthalmologist’s employees, under the captain of the ship theory, the ophthalmologist was considered the person with the greatest responsibility for the various parties’ actions.

Likewise, OMIC’s policy covers non-physician employees for their direct and vicarious liability in equipment-related claims. As discussed in the Risk Reduction Strategies article, technicians may be found liable for improperly setting up phaco and vitrectomy machines, programming lasers, or preparing gas for retina procedures. Their limits of liability are almost always shared with the employing ophthalmologist or entity (who is generally vicariously liable for the employees’ actions).

Entity liability arises from several avenues in equipment claims, all of which OMIC cover. First, the entity (or its directors, officers, or other members) can be held directly liable for the hiring and training of employees and credentialing of utilizers. Entities can also be held vicariously liable for the actions of their employees and others for whom they are legally responsible. In the loose microkeratome claim, the ASC contributed to the settlement, likely due to its direct liability for hiring and training the employed technicians and possibly the credentialing of the ophthalmologist utilizer, in addition to its vicarious liability as the techs’ employer.

Entities may also be directly liable for improperly maintaining and calibrating equipment. In the lead article’s LASIK calibration claim, the claim was settled on the ASC’s behalf because it was determined that the ASC’s tech had improperly calibrated the laser, making it off-center for a number of procedures.

When claims against OMIC insureds are clearly products liability cases, OMIC will work to get the ophthalmologist, ancillary staff, and entity dismissed from a suit that should be against the manufacturer alone. For example, both the lead article’s scleral burn from phaco and fiberoptic burnout cases were determined to be manufacturer issues and the OMIC insureds bore no liability. Other times, it takes settlement by various defendants to close a claim, such as the case with the extra piece of plastic on the phaco sleeve, which was settled by the manufacturer and ASC, while the physician was dismissed.

These cases can be complicated and often include both covered and uncovered allegations. While OMIC has a responsibility to its member-owners to reserve its rights in these situations, we work hard to defend the claim, cover our insureds where they are responsible, and appropriately shift liability when it lies elsewhere.