Nurse’s Malpractice Insurance: Is it a must?
Archie, a student nurse, is spending his time surfing the internet, browsing for articles to read. He’s checking out articles about nursing concepts and anything related to the nursing profession one by one when he encounters one which intrigues him. It’s about nurse’s malpractice insurance.
Wait, what? Malpractice Insurance for nurses? He finds himself double checking if what he just read was right. And it was. It’s really malpractice insurance. Yes, he has heard about health insurances and the like offered as benefits for nurses, however, this is his first time to ever hear about this type of insurance. What is it exactly all about and what is it for?
His curiosity takes over and not wanting to delay knowing more, any further, he decides to click on the link and educate himself. This must be important, I might need this in the future, he says to himself as he waits for the article to load.
What is a malpractice insurance?
As a nurse, you’ve worked hard to provide the best and quality nursing care to your patients. You’ve toiled hard just to save lives and to improve your career. However, no matter how good your intentions may be or how good you are as a nurse, some things don’t go as planned and things could go wrong. Worse, it may even lead to a lawsuit filed against you.
Nurses are vulnerable to being sued and sadly, it only takes one lawsuit to damage your career and even your financial future may be put at risk. So, to be prudent, it is important for you to take actions that would help you save your finances and all the things you’ve worked so hard for. This is where the malpractice insurance comes in as it helps safeguard you, your license, your assets, as well as your financial future.
Specifically, a Professional Liability Insurance protects you against covered claims arising from real or alleged errors or omissions, including negligence, in the course of your professional duties. It should be remembered that legal defense and settlement costs are paid in addition to the limits of liability.
Professional Liability Coverage offered by employer
While many employers provide some Professional Liability coverage, chances are that coverage may have some serious gaps. Your employer’s policy may cover you, but only up to a point since the employer’s policy is created to fit their specific needs and protects them first. The gaps may include:
- Policy limits may not be high enough to protect you and all your co-workers.
- You may not be provided with coverage for lost wage reimbursement, licensing board hearing reimbursement and defense costs.
- You may not be covered outside of the workplace, such as when you engage in volunteer or part-time work.
- You may not be covered for suits filed after you have terminated your employment.
The type of policy and how much coverage a Nurse needs
There are two popular types of policies that are purchased:
- Occurrence-based – any covered incident occurring while the policy is in effect even if the policy is now cancelled and/or you have retired
- Claims-made – any covered incident only while the policy is in effect
Do we need our personal malpractice insurance? What would it give us?
Important advantages of having one’s own policy are:
- The NP will have her/his own legal counsel with expenses covered.
- The NP may be covered for incidents that occur out of the employment setting (depending on the terms of the policy).
- The NP can purchase limits that may be higher than the employer’s.
- If the NP purchases an occurrence policy, the NP will be covered if he/she leaves the employer’s practice, and need not purchase a tail.
The disadvantages of having one’s own policy are:
- The plaintiff may draw the NP into the lawsuit, or attempt to keep the NP in a lawsuit longer than justified, in hopes of drawing on the NP’s insurance. However, this may happen whether or not an NP has his or her own policy, as a plaintiff will not know until the “discovery” part of the litigation process whether or not the NP has an individual policy.
- It is a significant expenditure.
What should I consider when deciding to go solely with my employer’s policy?
Before electing to go solely with an employer’s policy, ask the following questions of the employer:
- Who is the insurer?
- What are the limits?
- What is the company’s financial stability rating?
- Am I a named insured? If not, what policy language assures that I will be covered?
- Are there any requirements on NP practice, such as level of supervision, that must be met under the terms of the policy?
- Does the policy state any conditions that I must meet in order to stay covered?
- Is it an occurrence policy or claims made? If claims made, ask: Who will pay the premium for the tail? If the employer refuses to promise to pay the tail premium, ask: How much will the tail cost?
Purchase your own policy if:
- Your employer’s policy is claims made, the employer won’t pay for the tail policy, and you can’t afford to pay for the tail.
- You are not clearly one of the additional insured individuals on the employer’s policy.
- You perform NP services outside of your employment.
- Your employer covers you only under certain conditions, and you can’t meet all of those conditions.
- The employer’s insurance company has a rating lower than A-.
- The employer’s policy limits are below $1 million per incident.
If working for a government agency, the considerations are:
- Am I protected under a Tort Claims Act?
- If so, are there are any conditions under which I could be sued as an individual?
If working for a hospital or large organization, the considerations are:
- Does the organization purchase a commercial policy?
- Is the organization self-insured?
- If the organization has a commercial policy, what are the exclusions (ie, what are the circumstances under which I would not have coverage)?
- If the organization self-insures, are there are limits to what the organization would pay in the way of damages, attorney fees, and expert witness fees?
- Are any of my activities as an NP excluded from coverage?
You may not think that a malpractice insurance is important for us nurses, thinking that we are not doctors and that we have never even heard of nurses getting sued. Some may even think that getting one costs too much and isn’t really necessary, but as professionals who are prone to being sued, it’s always best to be sure. And before you make any major decisions about your future, make sure that you are aware and well-informed first.