Should I Carry Nursing Malpractice (Liability) Insurance?

Malpractice (liability) insurance provides essential legal and financial security. Many Nurses go "bare" and never really consider Liability insurance as important. Be sure you are well informed before you make any final decisions about your future. Nurses Career Support Video Knowledge

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This question comes up frequently and is asked of me quite often, "should I carry malpractice protection?"

What is Malpractice?

Simply put, it is a failure to adhere to a standard of care or conduct by a professional such as a Physician, Nurse, Attorney, etc. Malpractice occurs when it can be proven that the professional had a duty to provide a standard of care/conduct, breached that duty, an injury or damage resulted, and the injury/damage was caused by the breach.

No matter how educated, confident, and careful the Nurse is, unintentional mistakes can and will happen. Accidents will occur. And, unfortunately, willful neglect can be an issue. Injury and death very often are the results of mistakes, accidents, and neglect. Families want to know what happened. Even in the best scenario, the Nurse feels embarrassed and ultimately fears what the damage could do to a perfect professional reputation. Nurses must have the option of protecting their professional reputations and personal assets. Having individual is a smart solution.

Nurses will often make the following statement

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My employer covers me so I don't need my own malpractice/liability policy.

Yes, your employer's policy may cover you, but only up to a point. Remember: Your employer's policy is created to fit their specific needs and protects them first. You may even be told (by your employer HR) that you do not need your own policy. What they do not tell you is that they want you to be represented by their attorneys. They do not want "outside" representation for they know that their best interests will not be first and foremost.

All malpractice liability insurance policies have limits of liability. If you are only covered by your employer's insurance, other defendants employed at your entity may and probably do share your liability limits under the same policy. If you, as well as others, are named in a suit, your legal costs, including any settlement, could exceed your employer's shared liability limits. This would mean out-of-pocket expenses for you.

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What type of policy and how much coverage do I need as a Nurse?

These are questions that are very important when considering a policy.

Two Popular Policies

  • Occurrence-based - any covered incident occurring while the policy is in effect even if the policy is now canceled and/or you have retired
  • Claims-made - any covered incident only while the policy is in effect

The cost of a policy is economical and reasonable. For example, the annual premium could cover the first hour billed by Attorney. $1,000,000/$6,000,000 coverage premiums are approximate $100/year in most states for the Registered Nurse (RN) as well as for the Licensed Practical/Vocational Nurse (LPN/LVN).

Links of Interest

One major benefit of an individual policy that is often overlooked or taken for granted when considering coverage is license protection. Nurses need to be aware that this will extend beyond their employer's coverage and includes discipline issues that can be brought up by the individual Nurse's Board of Nursing (BON). Many Nurses do not have the financial ability to go against the BON, therefore, license protection is a must.

Another all-important beneficial consideration is that policies normally will include coverage regarding libel, slander and patient confidentiality, including HIPAA issues. These issues can be troublesome and include a great cost for the Nurse.

Finally, a common statement that is incorrect and based on myth ...

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Malpractice liability insurance will make me a target and I'll be named in a lawsuit.

When being named in a lawsuit, no one knows you have your own personal policy unless you have revealed this information. Only after a lawsuit is filed and only during the period of the discovery phase is this information available.

So, do you carry your own individual malpractice/liability insurance? In the end, the question of whether or not the Nurse should carry malpractice/liability insurance is a personal one and should be seriously considered.

The peace of mind knowing that you are covered is overwhelming.

The peace of overwhelming reassurance.

It's better to have it and not need it than to need it and not have it. Just like a gun.

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Nursing coverage overseas for mission work-

Hello,

I will be attending a mission as a surgical nurse in Guatemala in the next few months and wondered if there is any legitimate company that provides liability insurance while overseas. I have a carrier for work here in the U.S., but have yet to discover a policy online that works with mission projects.

Thank you for any ideas!

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Specializes in Oncology.
PS0812 said:
As a clinical nurse I always thought that I should have my own malpractice insurance. I knew - as I was told - that the hospital covered all their nurses for malpractice. Once I left the clinical setting and started working for an insurance company my opinion changed. I was asked to review a case (at my former hospital) in which it was my opinion the nurse was negligent (short story, she failed to recognize impending signs of increased intracranial pressure). The patient died and the family sued the hospital, the neurosurgeon and the nurse. The hospital under the doctrine of respondeat superior (let the master answer), the neurosurgeon (who had his own insurance) and the nurse who felt she had coverage not only through the hospital but her own malpractice policy were all sued. When you look at a malpractice policy, under the conditions section, there is wording to the effect that "If any other coverage is enforce at the time of the occurrence, this policy is secondary". Both the hospital's policy and the nurse's policy had that statement (as they all do). Well, when the nurse was asked (by the hospital's risk manager) if she had malpractice insurance - which she did, the hospital denied coverage based upon the "If any other coverage is enforce......." clause. So she put the claim under her coverage only to find out she had no coverage for the exact same reason. She had to, at her own expense, hire two attorneys. One to defend her in the malpractice action and one to sue both insurance companies for coverage. After much and costly litigation (at her expense), she eventually won coverage (by court order) under the hospital's insurance policy. The defense attorney for the hospital told me that if I worked for a hospital to never have my own policy as I would find myself in the same boat should I be sued while in the course/scope of my employment. I learned a valuable lesson at someone else's expense. I caution all of you to read and understand all aspects of your personal malpractice policy, should you have one.

I've never had personal before, but some pretty scary things have been happening at work lately, and I'm thinking now I want to get it. I never considered this potential issue, before, though. Anyone else have any thoughts on this risk?

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Hey fellow deadhead. I was looking to see what people thought about NSO when I noticed your stealie. I live in NY. Are you, by chance, going to Lockn? I'm asking because I need a ride for my bicycle.

I graduated nursing school in May. I'm still looking for my first job - the one that doesn't require experience. Not so easy to find.

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Specializes in Critical Care.

RiskManager, at the student nurses conventions in my state there was a nurse who spoke about her experience. She stated that once she was fired, the hospital's insurance no longer covered her when she and the hospital were sued by a patient's family. The hospital settled, but since she was no longer an employee, and she had to get and pay for her own attorney to fight for her license. Can you provide some insight on this?

RiskManager said:
The above scenario by PSO812 is not unusual. Your liability insurance from CNA or Liberty Mutual has an 'other insurance' clause and the hospital's insurance also usually has an 'other insurance' clause. You may be stuck in the middle with each insurance company denying coverage for a claim. Many states have appellate court decisions in which this issue has been previously considered and a legal decision handed down that specifies which insurance company responds. Sometimes it is the hospital insurance, sometimes it is the nurse's insurance, and sometimes they both respond on a 50/50 basis.

There is a reason why nursing liability insurance for the typical nurse is so cheap. It is because they rarely pay any claims. And the reason they rarely pay claims is that coverage is denied under the 'other insurance' or 'excess insurance' clause. Generally speaking, the hospital is on the hook for your liability as an employee.

There may be good reasons for you to purchase your own liability coverage, which I have discussed elsewhere, but you need to purchase it with your eyes open after researching the issue, and not just assume that the insurance company is going to always cover you and fight vigorously for you, in exchange for your $ 200/year premium.

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Specializes in Healthcare risk management and liability.
sheika21 said:
RiskManager, at the student nurses conventions in my state there was a nurse who spoke about her experience. She stated that once she was fired, the hospital's insurance no longer covered her when she and the hospital were sued by a patient's family. The hospital settled, but since she was no longer an employee, and she had to get and pay for her own attorney to fight for her license. Can you provide some insight on this?

From the scenario described here, my opinion is that the nurse was involved in a BON licensure dispute that may have come out of the malpractice case. The hospital's covers you for malpractice allegations as a current or former employee. That malpractice coverage persists even after you are no longer a hospital employee. Unless I see evidence to the contrary, I am pretty confident that the nurse did not pay any money to settle the malpractice claim, the hospital's insurance company did and possibly due to her actions as an employed nurse.

Typically, the hospital's or any other healthcare facility liability insurance does not cover employees for professional licensure disputes, whether you are a current or former employee, a nurse, a physician, a pharmacist or whomever. It covers employees for malpractice. Malpractice and licensure defense are two different things. This nurse may have thought that the hospital's insurance did provide such coverage, but she is incorrect, and had she asked, the hospital's insurance company would have told her this. In some cases, the employer may out of the goodness of their heart assist current or former employees with licensure issues, but it is not required, and it is pretty darn unusual to do this, in my experience.

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RiskManager said:
The hospital's liability insurance covers you for malpractice allegations as a current or former employee. That malpractice coverage persists even after you are no longer a hospital employee. Unless I see evidence to the contrary, I am pretty confident that the nurse did not pay any money to settle the malpractice claim, the hospital's insurance company did and possibly due to her actions as an employed nurse.

You keep explaining this in great detail on multiple threads, and I'll give you props for being consistent and freely acknowledge that you have more experience in this area than I do. But please explain to me how come I saw a kazillion times in my experience as a hospital surveyor, investigating complaints, deaths, and other negative outcomes on psychiatric units in my state, that, whenever something bad happened, the first thing the hospital attorneys did was go looking through the chart for one or more nurses they could "blame" for the incident, for some violation of hospital policy, however negligible, and then the hospital would fire that nurse (or those nurses). When I was surveying, we would sometimes be, literally, met in the hospital lobby by the hospital administrators and attorneys as we were walking in the front door because they were so eager to explain to us (and anyone else who wants to listen) that whatever happened wasn't the hospital's fault, it was Nurse X's fault, and they have already fired Nurse X as a show of good faith (and our visits were all unannounced, so they didn't know when we were coming -- someone was literally watching and waiting for us to show up).

You never seem to mention joint and several liability. Depending on state law, liability and damages in a malpractice suit get divided proportionally among the defendents depending on the proportion of responsibility each party bears for the injury (obviously, that's a grossly oversimplified explanation.) In several liability states (both my former and current states are joint and several liability states), the hospital can reduce or eliminate its liability in the case by arguing (successfully) in court that another entity (the unfortunate Nurse X) was more responsible for the injury than the hospital, because the hospital had told Nurse X the correct and safe way that the employer wanted her/him to do things (the hospital policies/procedures) and Nurse X had chosen to ignore those instructions and act on her/his own. That (that it was Nurse X's fault, not ours) is the explanation I heard from hospital administrators and attorneys, as a regulator (which, obviously, is different from being involved in the lawsuit that was obviously going to result from a lot of the situations we investigated), more times than I can count, and it certainly appeared that they intended to make the same case in court if it came to that.

If the hospital's attorneys are arguing in court that the hospital isn't liable for the error because it was Nurse X acting without authority who created the problem, how on earth are the hospital attorneys then going to turn around and defend Nurse X? I've been told numerous times by other people in a better position to know than me that hospitals can easily get around respondeat superior by arguing that the individual employee had chosen to disregard the employer's instructions on how to do the job, and therefore, the employer isn't responsible for the outcome (which is why the risk management people and attorneys start looking for someone they can blame as soon as they're aware something Bad has happened), and that it's basically up to the hospital whether it is willing to cover you or not -- if they can make an argument that you violated their established P&Ps, it's buh-bye, Nurse X, you're on your own.

(Of course, I've also always heard all these years from people who know better than me that hospital risk management people and attorneys will always tell nurses that they don't need their own coverage because they want to keep you dependent on the hospital's attorneys for legal advice; they don't want you having someone representing your interests, apart from the hospital's interests ... But maybe that's not true, either.)

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Specializes in Healthcare risk management and liability.

Elkpark, we are talking about two different things here: regulatory violations that you deal with as a surveyor and civil legal liability that I deal with as a risk/claims manager. It is absolutely the case that after a significant regulatory violation that sometimes people are fired for committing errors causing the violation or adverse clinical outcome. If the hospital has a policy on medication administration, and you negligently or by choice violate it and give the patient a bolus of potassium chloride causing their death, in all likelihood the hospital is going to fire you. And the hospital will be telling the state and TJC that they did so as part of the corrective action. So from that standpoint, you are correct: the nurse may be left dangling in the wind for their role in the regulatory violation. You can either call that throwing someone to the wolves or holding them accountable for their actions under a just culture approach.

This is however different than the civil legal liability of the hospital for the acts of their employees. Generally speaking, the hospital will still be on the hook legally and financially for that nurse giving the bolus of potassium chloride. As I have mentioned before, there may be unique statutory, regulatory or case law in a particular jurisdiction that may apply in terms of vicarious liability or respondeat superior for the acts of the employees and the liability of the employer, but certainly in my cases that span several states, I am still legally and financially responsible for the acts of that nurse and my hospital insurance pays for it.

As to arguing one thing to defend a regulatory violation and arguing another thing to defend against civil legal liability, it happens all the time. The two causes of action are not synonymous. If in the civil legal liability case you cannot successfully defend the nurse on the standard of care, then you should probably be looking at settling the case.

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This reminded me that my insurance had lapsed and I needed to update. Thank you!

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sirI said:
Hello, !Chris

Like VickyRN said, I, too, advise my students to secure personal/individual liability insurance. But, I advise them to purchase while still a student.

With NSO, these rates are around $29 /year for 1,000,000/6,000,000 coverage. It is rare a nursing student is successfully sued, but they are named in lawsuits. It is, as I pointed out, a small fee for peace of mind.

$29/year sounds great? Where can I sign up for this insurance?

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Specializes in OR, Nursing Professional Development.
mago8388 said:
$29/year sounds great? Where can I sign up for this insurance?

The quoted post is from 7 years ago and refers to the student rate. The student rate is lower than the licensed nurse rate which is lower than the advanced practice nurse rate. Currently, I pay $109/year for my policy through NSO.

The two most commonly mentioned are from NSO and Proliability. Both offer options to obtain quotes on their websites.

1 Votes
Specializes in critical care, ER,ICU, CVSURG, CCU.

I do not know about NSO...I have had malpractice with them since maybe 2007.... This past year when I attempted to renew...... And paid from their invoice..... I kid you not....they told me they were "trying to locate my account".... I have very little faith in a company.....that I have had policy with for nine years, who all of a sudden, "can not find my account".....how can they represent me, if they can not find a tenured client's account.... Multiple emails, went unanswered.... So if they could not find my account after three months... I demanded refund... Not only was that request not responded to.... So when it comes to NSO...."buyer beware"...I am seeking private malpractice ins...coverage, they took my money for nine years, and all of a sudden...."can't find my account "...glad I really did not need them....

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