What’s the Difference Between Employer Provided Malpractice Insurance and Individual Professional Liability Insurance?

While working on the job, have you ever been concerned that a mistake or an accident could cause you to be sued? Even if that happened, you would be covered by your employer’s malpractice insurance, right?

Well, maybe and maybe not.

We interviewed David Griffiths, Senior Vice President for the Healthcare division of Aon Affinity. Griffiths has overall responsibility for the malpractice insurance program for the Nurses Service Organization. We asked him to explain how and when nurses are covered. (Note: because individual experiences are different, always seek professional advice regarding your own situation.)

Why should nurses considering having individual liability insurance?

Employer insurance is designed to protect the hospital or health care facility first and foremost. A hospital or health care facility’s coverage may extend to health care staff; however, there are key differences in how the coverage activates, and there could be gaps that would be detrimental to a nurse. Getting your own professional liability policy is a key way to make sure you are in control of the protection of your own career at all times. 

What is the overall difference between the two types of policies?

• Employer Provided Malpractice Insurance: 

A hospital or health care facility’s attorneys are required to place the best interests of those organizations first. However, this may or may not be in your best interests depending on the situation. Your career is far too important to place in the hands of your employer, its attorneys, and your employer’s insurance company. An individual professional liability insurance policy ensures you have a team in your corner that has your best interests in mind.

• Individual Professional Liability Insurance:

There are two key things an individual professional liability insurance policy does that an employer’s policy may not:

1. An individual professional liability insurance policy like those NSO provides covers you as a nurse 24/7–an employer’s policy only covers you when you’re on the clock.
2. In addition to professional liability insurance, your individual policy provides license protection — most employer provided coverage does not offer defense of license to the board because it may be the employer who submits the complaint. Your license is your means of practicing as a nurse, and if it is threatened or taken away your livelihood is at stake.   

Should only nurses in certain fields look into it? Why or why not?

All nurses should consider an individual professional liability insurance plan. There may be differences in coverage for nurses in certain fields, but overall this type of insurance is an effective source of protection for all nurses.

Are there any kind of specific experiences in nurses’ careers that should make them obtain professional liability insurance?

A board complaint can be made against your license for any reason by anyone.

An analysis of license complaints from NSO insureds show the location of most incidents are actually in the hospital.

The complaint could arise from a patient, family member, the hospital, or even a colleague.

Most employer provided coverage does not offer defense of license to the board because it may be the employer who submits the complaint.

Your license is your ability to practice as a nurse, it represents a huge investment of your life, it defines who you are (as well as helps pay the bills).  

What other factors should be considered when to purchase this kind of insurance?

Nurses help individuals when they are most at risk. Today, nurses are more at risk for legal action than ever before. An individual professional liability insurance policy helps them manage that risk and protect their careers and livelihoods. Many nurses may think an individual policy is complicated and expensive to get, and that’s simply not the case. In most cases, coverage can begin as soon as a completed application is approved and payment is received — online in a few minutes. Every nurse can afford malpractice insurance — the premium is in most cases about $100 a year, and the alternative is potential liability for upwards of millions of dollars on legal fees and payouts.  

Is there anything else about the differences between employer provided insurance versus individual professional liability insurance that is important for readers to know?

Depending on the scenario, a lawsuit could be brought forth years after the incident occurred. Many times, the nurse may have left the facility. Depending on the type of insurance the employer carries, coverage may end on the last day of employment. Nurses need to be aware of this very real scenario. One of the values of having individual coverage is that it goes with you.