Ouch, You Hurt Me! Do Nurse Practitioners Need Their Own Malpractice Policy?

Comprising over 100 different specializations that span hospitals to community health centers, nurse practitioners play an integral role in promoting good health and providing essential care. Much like any other licensed medical profession, nursing comes with its own potential risks, emergencies, and mistakes. Medical negligence is one of the leading causes of death in the United States and can come at any stage of the process, including diagnosis, treatment, and counseling after treatment.

Patients file about 15,000 to 19,000 medical malpractice suits per year in the United States. While an estimated 80 percent of medical malpractice suits do not end in a payout, patient misdiagnoses resulted in about $38 billion paid in total from 1986 to 2010. Along with financial losses, malpractice suits can result in a variety of other consequences. In fact, some NPs can even lose their license, but that’s where medical malpractice insurance may help. Read on to learn more about nurse practitioner and physician assistant malpractice coverage plans and why you need them.

What is Medical Malpractice Insurance?

Medical malpractice insurance, also often referred to as medical professional liability insurance, is a type of insurance designed to protect licensed healthcare professionals, including doctors, dentists, and nurse practitioners, in the event of a malpractice suit. Medical malpractice policies cover claims involving:

• Bodily injury
• Property damage
• Medical expenses
• Any sort of personal injury, including mental anguish

However, based on the complexity involved with liability cases and the process of discovering negligence, most of the money from a malpractice policy goes toward investigating and defending claims as well as providing settlement expenses. This generally includes:

• Legal and attorney fees
• Court costs
• Paying for medical damages
• Punitive and compensatory damages
• Arbitration and settlement costs

However, medical malpractice insurance does not cover liability that comes from sexual misconduct and other criminal acts.

Types of Medical Malpractice Insurance for Nurse Practitioners

There are two main malpractice policy options for nurse practitioners, claims-made and occurrence. Below we will review the different types of insurance for NPs:

Claims-Made Policies

With claims-made insurance, you are sometimes only covered if the policy is in effect when the incident took place and when the claim was filed. That can get complicated as several months may pass between an incident and a patient making a claim.

To compensate for this, many claims-made policies include tail coverage, which extends the insurance coverage period for a set amount of time after the policy ends. If tail coverage is not offered with the main policy, you can usually purchase tail coverage for a one-time assessment fee up to two times the annual premium.

While tail coverage might be pricey, it is a necessity, especially during periods of transition or uncertainty, like when you are changing insurance carriers, moving to a new position, or retiring. Furthermore, your previous employer may cover the tail coverage costs to ensure protections, while sometimes new employers will pay for tail coverage as a benefit.

Occurrence Policies

Unlike claims-made policies, occurrence malpractice coverage policies cover any claim for an incident that took place while the policy was in effect. That means that, even if you are not covered now, you are still protected if the incident occurred while you were covered. This also means not having to worry about tail coverage, though occurrence policies are less frequently offered by employers and generally more expensive.

Medical malpractice insurance for nurse practitioners is most often occurrence based. Understanding the type of policy that you have is essential, especially if you are changing employers or going through any sort of transition. Going from an occurrence policy to a claims-made policy is actually beneficial and results in no gaps in insurance coverage. However, switching from a claims-made policy to an occurrence policy will require the purchase of tail coverage.

Why Do You Need a Medical Malpractice Policy?

Although doctors and physicians are more likely to get sued for malpractice than nurses, trends are beginning to shift. Individual team members are being recognized for their contributions, though that also means greater accountability. Nurse Practitioners hold integral positions in healthcare settings, and that also means potentially suffering the consequences of a malpractice suit.

Medical malpractice does not always mean that anyone made a mistake either. Patients can sue you if they believe you are responsible for an outcome, even if that belief is wrong or unfounded. Lawsuits do not necessarily need to hold merit, but you will still incur the expenses required to hire an attorney and maintain legal defense. With malpractice insurance, you have the money in hand to at least take care of legal expenses.

Why Do You Need Your Own Medical Malpractice Insurance?

Medical malpractice insurance is usually readily available via your employer, but it’s worth it to consider carrying your own liability policy. As nurse practitioners are often considered contractors, you may not even be covered by your employer’s policy. Here are some reasons why you should apply for your own medical malpractice policy.

The Named Insured

When you use your employer’s malpractice policy, you are usually not the named insured. Instead, you may see the company’s name or “all employees” as the insured party. These policies exist to protect the employer from liability from employee actions.

That ultimately means that the policy is designed for your employer’s best interests, which may not always line up with your own. For example, you and your employer may not see eye to eye on an incident. If you were performing outside your duties as a nurse practitioner, the employer’s attorney may defend you, but you may still be responsible for paying out any judgment awarded to the patient.

Furthermore, employer-based insurance policies only protect you when you are at work. If you perform nursing duties outside of your job as a volunteer, you should absolutely look into purchasing an individual policy.

Legal Representation

This goes hand in hand with having your own name as the insured. When you use your employer’s malpractice insurance, you may be provided an attorney, but they are looking out for your employer’s best interests. Depending on your employer’s policy, you may not even be provided with an attorney. Having your own insurance means that you are assured your own legal representative who is dedicated to your specific needs. Some medical malpractice policies may even allow you to choose your own attorney. This adds further peace of mind.

The Nursing Board

Malpractices policies from a hospital or employer usually do not cover complaints to the nursing board. Even if you are protected in a lawsuit, you may not be covered from complaints to the nursing board. This comes with the potential risk of losing your nursing license. All the experience and class credits that you have earned over the years could be gone in seconds, and your ability to legally practice as a nurse practitioner is null and void. Purchasing your own malpractice insurance ensures protection in lawsuits as well as complaints to the nursing board.

This is known as license protection, which provides you with the funds specifically for legal representation when the nursing board is involved. Each policy has a different licensing protection limit, but most policies will provide up to $25,000 in benefits each year. For nurse practitioners, facing disciplinary charges from the board is more likely than a malpractice lawsuit. Considering that your license is integral to legally practice as an NP, it’s a good idea to pay a little more for license protection.

Risk-Management Services

Providers of individual malpractice policies usually offer risk-management services to help reduce the risk of future malpractice claims. This may include:

• Live seminars
• Continuing education credits
• Claim trends
• Assessment forms

Additional Benefits

Individual malpractice policies often come with greater flexibility and more benefits than employer-provided policies, like the license protection benefits mentioned above. Other additional benefits may include coverage for:

• First-aid expenses
• Assault charges
• HIPAA violations
• Slander and libel
• Property damage
• Depositions

These added benefits may result in higher nurse practitioner insurance costs to your premium, but it could be worth it should the situation arise.

Insurance Policy Limits

All professional liability insurance policies, medical or otherwise, limit the amount of liability that is covered. Policies usually cover up to $1 million in liability per claim and $6 million for all claims made within the insurance policy period. If you have an individual policy, you have access to all of that liability coverage. For employer-provided policies, those liability limits are shared among all the named defendants, meaning all of the employees at your company.

Sometimes, the costs for defense and legal fees are set within those limits, but that reduces the amount available for settlement and judgment awarded. Other times, the defense costs are not included within those limits, leaving you the full amount for settlements and compensatory costs.

When you are working your shift, the last thing you need to worry about is if you are protected in the event of a malpractice suit or nursing board complaint. More than anything, getting your own medical malpractice insurance provides you with peace of mind, ensuring that you are legally and financially protected for any potential incident.

Sources:

1. https://www.investopedia.com/terms/m/malpractice-insurance.asp
2. https://www.naic.org/cipr_topics/topic_med_mal.htm
3. https://www.acponline.org/about-acp/about-internal-medicine/career-paths/residency-career-counseling/guidance/medical-malpractice-insurance
4. https://www.americannursetoday.com/need-malpractice-insurance/
5. https://www.cphins.com/3-reasons-nurses-need-an-individual-professional-liability-policy/