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Why You May Need Personal Medical Malpractice / Professional Liability Insurance

Fabiah Admin

Why You May Need Personal Medical Malpractice / Professional Liability Insurance

Many nurses and, non-physician, healthcare professionals do not carry personal medical malpractice insurance, also known as professional liability insurance. Some incorrectly believe they are already “fully covered” by their employers while others believe that only doctors should purchase personal coverage. Often, they think the cost of coverage is higher than it is. Or, since they’ve been lucky so far, they believe they could never be involved in a malpractice lawsuit.

However, depending on your individual circumstances, obtaining personal malpractice insurance might be something you should seriously consider. In many cases rates are affordable, and the peace of mind is well worth the cost.  For instance, the cost for the coverage (and the peace of mind!) is only around $100 a year for a registered nurse. You can click here to get your own quote.

The objective of this article is to clarify what personal medical malpractice insurance is and to provide you with information that can help you make a sound decision on whether to purchase personal coverage.

Sounds good? Let’s get started! 

What is Medical Malpractice Insurance?

According to wikipedia “Medical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error.” Most medical malpractice cases in the United States are handled through civil suits, however, in cases of extreme negligence, criminal charges can also be brought. Determination of claims or charges depends on each state’s own system of civil and criminal procedure. There are tens of thousands of medical malpractice claims filed every year just in the US and these claims impact everyone involved in the presumed act of negligence (doctors, nurses, owner of facilities, etc.).

Medical malpractice or professional liability insurance covers the cost of responding to claims, answering lawsuits, defending the individual in depositions in which the insured is not being sued, and defending claims against the person in their individual capacity.

Who needs Medical Malpractice Insurance?

The short answer is that medical malpractice insurance is recommended for all healthcare professionals if they want to protect themselves against the possible consequences of a lawsuit. Hospitals, doctors, nurses, and healthcare professionals in general should be covered to reduce the risk of both professional and financial ruin.

There are two ways people can be covered by Medical Malpractice, through a business or/and a personal policy. Below we look at both those ways.

Business and Personal insurance

Simply put, a business policy protects a business. If you work for a hospital, a clinic, or any health service provider, then your employer is typically protected by their own business insurance. That business insurance is designed to provide coverage for the business against medical malpractice. The policyholder is the business, and the insurance company protects the business from malpractice claims brought for the acts or omissions of its agents, i.e., doctors, nurses, and other employees. 

Here is the good news: healthcare professionals, if employed at the time of the incident, are always somewhat covered by their employer’s policy for negligence. The employer has “respondeat superior” responsibility for the acts and omissions of employees.

The bad news is this does not mean employees are fully covered! There may be conflicts of interest between you, your employer or other employees in any lawsuit. There may also be insufficient coverage if you are sued individually and your employer has minimal coverage.  Please keep reading to understand why you should seriously consider buying your own personal insurance with Fabiah.com to be fully covered.

Business insurance limitations

Gray Areas: At times, the extent of coverage of the business policy can be unclear for grey areas and is a cause of confusion for employees.

Technically it is the loss to the business as a result of a malpractice claim that is always fully covered by the business policy. Should the business fail to pay for ongoing coverage after you have left your job you would likely have no coverage.  You also may not have coverage if the employer’s policy has insufficient policy limits for the damage at issue or the aggregate policy limits for the year already have been met due to other claims.

Things may become even more complicated in cases where your employer or their other employees have conflicting interests,  litigation drags on for years and the employer goes out of business, or when you are sued individually and the employer’s policy does not have high enough policy limits to cover the alleged damages putting your own finances at risk. Also, even when the employer’s policy covers your liability, there may be exclusions that mean the insurance carrier will not cover your actions.

Gaps in Coverage: Even when an insurance policy covers current and former employees across the board beyond the minimum “respondeat superior” principle, there may still be gaps in coverage. For instance, if you were the subject of a claim while doing something that violates HIPAA, state privacy laws or was an intentional act rather than a negligent act or omission – there may be no coverage.

Employer policies do not cover criminal or intentional acts and may not cover you for personal injury unrelated to your duties such as allegations of sexual misconduct, professional misconduct, or substance abuse issues which injure a third party.

Also, your employer’s policy may not extend to professional disciplinary actions arising from negligent incidents or patient complaints. For instance, personal insurance is needed if a Nursing Board or other disciplinary agency pursues charges that impact the insured’s professional license.

Obviously, an employer’s policy does NOT typically cover individuals who are independent contractors, locum tenens, or while “off duty” such as volunteering somewhere, assisting in an emergency, or otherwise not acting on behalf of the employer.

In summary: many employers, in good faith, tell their employees that they are fully covered. What they really mean is that employers are always liable for acts of negligence committed by their employees in the course of their employment up to a certain extent. To what extent will be determined by the specific business policy.

Therefore, our recommendation is that if you decide not to purchase personal insurance, be sure you understand what your employer’s policy states and be familiar with the risks you may be facing. Take the time and read their policy. It will be time well spent. If you change employers, start over again.

Without a doubt, however, the BEST way to ensure coverage for yourself is to purchase a personal medical malpractice/professional liability policy. It’s also affordable. Obtain your own quote at Fabiah.com

Benefits of a personal Medical Malpractice policy

A personal policy covers you –you are the policyholder! The insurance company is wholly focused on protecting YOU. The coverage follows you, regardless of where you work, whether your employer’s policy has gaps, or if you volunteer, etc. It’s an all-around-you protection. Your defense costs will be covered if a Nursing Board or other disciplinary agencies pursue charges that impact your professional license.

It’s peace of mind. The other great news? It’s affordable!

A few myths surrounding Medical Malpractice insurance

There are a number of “myths” surrounding medical malpractice. These are some of the most common:

  1. “Nurses do not get sued.” That’s not true. Frivolous lawsuits happen all the time and lawyers can sue everyone involved in the care and treatment of the patient.
  2. “If you have insurance, you are more likely to get sued.” This is not a proven fact. Additionally, neither patients nor their relatives should be privy to the fact that you are covered. A personal injury attorney will attempt to locate all sources of insurance coverage, but that is after the incident.
  3. “I need coverage only if I do something wrong.”  People sue for many reasons. Again, frivolous lawsuits occur every day. You may get sued and incur losses even if you did nothing wrong. Yes, it’s crazy.
  4. “My employer’s policy covers me.” As we explained above, gaps may exist, especially in terms of license protection, plus your employer may be underinsured, you may also be sued after you’ve left your job or your employer has gone out of business (that complicates things), or even while volunteering. The list goes on and on.

Prices of Personal insurance

As we mentioned above, personal Malpractice Insurance for Registered Nurses (RN’s) is generally around $100/yr, depending on the insurance company and extent coverage. However, coverage for Nurse Practitioners, CRNA’s, etc. can be more expensive. It can reach two or three thousand dollars per year or more. While this cost may seem daunting, a comparison of these prices against the potential impact of even one lawsuit may reveal the true affordability and benefit of the policy. You can get your own personalized quote at Fabiah.com

Is Covid-19 increasing the risk of Medical Malpractice claims?

The short answer is that the true impact of Covid-19 in malpractice as well as many other areas of healthcare is still being uncovered. However, the workload in clinics and hospitals has been disrupted, so the associated stress and the difficulties in patient care caused by the virus may result in an increase of “malpractice” claims. Taking into account the current unpredictable nature of healthcare and future claims, now is probably the right time to pull the trigger.

Why purchase coverage via Fabiah.com?

Good question. The answer is simple:

  1. We offer protection from MedPro, a highly rated carrier (A++ Superior by AM Best) owned by Berkshire Hathaway. In these times of greater financial uncertainty, you want to be covered by the most reliable carriers available. Compare our carrier’s rating with those offered by other providers. Many larger providers offer products by lower-rated insurance companies. Check.
  2. We do not pay referral fees to associations to market what we sell.
  3. We are typically less expensive than the competition. While we cannot guarantee that this is true in every state or for every profession, we encourage our customers to shop around. We are confident that nearly every time, you’ll be pleasantly surprised by our offerings.
  4. The team at Fabiah.com has over 20 yrs of experience in the insurance industry. We are working on providing the best solutions available in the market. It only takes a few minutes and costs nothing to take a look at what we offer. Just go to “Get a Quote” at the top of the page to see how affordable peace of mind can be!

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Even if you choose not to purchase your personal professional liability policy with us, we hope you decide to purchase a policy. Our primary goal is to make sure that all healthcare professionals obtain the appropriate protection for themselves and their careers.

We hope this blog article gave you a better grasp of Medical Malpractice/Professional Liability insurance for nurses and healthcare professionals. Make no mistake: this article is by no means exhaustive. Professional Liability coverage is complex. There are so many coverage variations, exclusions, state regulations, etc. and things can get very complicated. If you have questions, send us an email at info@fabiah.com.

Note: This article is designed for educational purposes only. It is not meant to be taken as specific legal or other advice. If you need advice on a specific incident or work situation then you should contact a nurse attorney or attorney in your state.