Liability Insurance after retirement

tothepointeLVN, LVN · May 24, 2012

The information I have been told is that if say a patient sues you for an event that occurred in 2004 and you had valid malpractice insurance in 2004 then whatever insurance you had should cover it. I would also like to know if this is correct.

nurseprnRN, BSN, RN · May 24, 2012

maybe yes, maybe no, tothepointelvn. you have to look at the terms of the policy you bought. there are different ways to be covered. as an example...

1. you buy a policy in january 2000 and start your first job. your policy covers you from the day you bought it.

1a. you quit that job and go to work somewhere else in 2004. you still have that policy. it covers you for anything that is alleged at job 1 and your new job, so long as you keep up the premiums.

2. you retire in 2008. you stop paying for your policy, and it lapses. then you are named in a suit from the first hospital, from 2003.

depending on the terms of your policy, either:

2a. ...you are not covered for that 2003 incident because you have no current policy, and you are on your own for legal help and, if judgment is against you, for damages

2b. ... your policy covers you now for that 2003 incident, because you were covered then, regardless of whether it is active now.

you must read your policy carefully to know what your policy is, because it can make all the difference in the world. no matter what anybody tells you, the governing authority is the policy you paid for. read it, or sit down with your agent and have him/her explain its terms to you. the peace of mind is worth it.

dudette10, MSN, RN · May 25, 2012

GrnTea: Are you aware of any insurance policies that require you to be currently covered by the company in order to have protection for events that happened in the past, even if you were covered by the company at the time the event occurred?

The reason I ask is this: If the answer is "yes," it essentially means you should never, ever change insurance companies. If I have coverage from Company A in 2003, but I switch to Company B in 2004, and I get sued for an event that happens in 2003 when I was covered by Company A, I can't imagine that any company's policy would say, "Hey, you aren't covered because you don't currently have a policy with us."

I agree with reading the policy, but just thinking it through, it doesn't make any sense that you need to be currently covered for protection against past events.

classicdame, MSN, EdD · May 25, 2012

check with your insurance agent. Some contracts are for the time you pay premiums only. Some cover for events that occured while you were paying, even years later. If you change policies be sure they cover what occured in the past - I doubt they will.

nurseprnRN, BSN, RN · May 25, 2012

dudette, the answer is yes, and i'm sorry my example didn't make that clearer. as for your imagination of company a never saying, "you aren't covered because you don't currently have a policy with us," that's wishful thinking on your part. they can absolutely say that. this is why you read the policy terms before you sign on the dotted line and send in your money.

you always have the option of asking a company c to cover you for prior years before they ever heard your name. they might take that risk. then if there is a claim for an act while you were covered by company a, a and c will fight it out off stage left later (and a will probably win, since your policy with them says they only cover you for legal actions brought while you have an active policy with them).

tothepointeLVN, LVN · May 25, 2012

If your insurance company does over you for the period where you were paying for coverage then it begs the question why get coverage at all if you have to be covered both a) at the time of the incident and b) the time the claim is made. Seems like the insurance company double dipping.

llg, PhD, RN · May 25, 2012

You might also want to keep insurance after you retire if there is a chance you will be involved in any activities in which someone may rely on your nursing skills or knowledge, be dissatisfied with the result, and sue you. Clubs, organizations, church groups, etc. Who knows what you might get involved in?

I hadn't really thought about it ... but it's a good thing to consider all the possibilities.

Purple_Scrubs, BSN, RN · May 25, 2012

Glad to see this thread. I was wondering if I could get away with dropping my liability ins for the next few years while I'm at home with the kids, but it looks like keeping it is a safer bet. I will also be checking the terms of my policy a lot closer to see exactly what time frame is covered.

Jolie, BSN · May 26, 2012

Occurrence policies cover what occurred during the time the policy was in effect, even if an action is taken years after your coverage comes to an end. This is the more expensive type of coverage and is essential for anyone in OB or other clinical areas where a patient may sue years after an event.

Claims made policies cover claims that are filed during the time that the policy is in effect and are less expensive to purchase. If you retire after having a claims made policy, you may wish to purchase additional "tail" coverage for actions that may be filed for the next few years after you retire.

FWIW, NSO charges 1/2 price premiums to inactive and retired nurses, to cover volunteer work and Good Samaritan issues.