(1) A governing body of a hospital licensed under ORS 441.015 to 441.119 and 441.993 may require all members of its medical staff to:
(a) Provide evidence of professional medical liability insurance in a reasonable amount as specified by the hospital governing board;
(b) Post a bond in lieu of evidence of professional medical liability insurance in a reasonable amount as specified by the hospital governing board; or
(c) Demonstrate annually financial responsibility for a reasonable amount as specified by the hospital governing board.
(2) As used in this section:
(a) “Medical staff” includes those individuals licensed by this state under ORS chapter 677 and granted privileges to practice in the hospital by the hospital governing board.
(b) “Professional medical liability insurance” means casualty insurance against legal liability for death, injury or disability of a human being arising from any medical, surgical or dental treatment, omission or operation.