Physicians Warned against Indemnification Clauses in Contracts, according to the Journal of American Physicians and Surgeons
TUCSON, Ariz., June 03, 2026 (GLOBE NEWSWIRE) -- Physicians who are contracting with a hospital, multispecialty group, or other organization need to be aware of potential traps, writes Jeffrey Segal, M.D., J.D., in the summer issue of the Journal of American Physicians and Surgeons. Dr. Segal is the founder of Medical Justice.
The “standard” pro-forma agreement, Dr. Segal writes, is 20 pages long and written in legalese. “Buried mid-paragraph is one sentence that could turn a routine credentialing hiccup into a personal bankruptcy event.”
The indemnification clause is a way to shift financial liability for various events such as negligence or property damage.
Some indemnification language is reasonable, even expected. It is common in contracts, insurance policies, and leases. The party being protected is kept “harmless” from these potential financial consequences.
You should not, however, directly indemnify for those things over which you have no control, Segal cautions. And you may need to have insurance to cover obligations you assume.
Importantly, obligations should not be triggered by allegations, without findings down the road. If payment obligations start upon mere accusation, the physician may be paying the legal fees to defend a hospital’s actions. Phrases such as “finally adjudicated” or “admitted in writing” are helpful revisions, and physicians should demand proportionality in responsibility, Dr. Segal advises.
“Physicians often believe they have no negotiating power and that employment contracts are ‘take it or leave it.’ That is sometimes true. Sometimes not,” Dr. Segal writes. “If an institution will not yield on anything, that is a reflection of its corporate culture. And it is unlikely to get better than when they are actively wooing you to join their ranks.”
The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.
Contact: Jeffrey Segal, M.D., J.D., info@medicaljustice.com, or Jane M. Orient, M.D., (520) 323-3110, janeorientmd@gmail.com
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