NP's Malpractice insurance....

core0 · Sep 23, 2008

i have been under the impression that if you carry your own independent malpractice that you are more likely to be sued. someone told me that in the past. if, however, you are covered by a blanket group policy, the litigators realize they will not get as much from you... as opposed to someone also having an independent insurance. what do ya'll think about that? because i have thought of getting my own... just don't want to open myself up for higher possibilities of litigation.
how do you know what limits to choose?
also... you get a recent graduate discount if you completed your program within the previous 12 months, just fyi.

i'll let siri or one of the lnc's comment on the getting sued if you have insurance part. from what i've heard thats a myth. in my mind what your own insurance does is buys you control. lets say that you have group coverage and you get sued. you don't want to settle. in most cases if you have your own policy then you control whether you settle or not. on the other hand it may be easier and cheaper for the owner to settle. after all they are not the ones that are listed in the national practitioner data bank for the rest of their life.

the other issue is what happens with limits. lets say the practice has a $1/3 million policy. you and the doctor gets sued. the case goes to trial and you are each assessed $1million. the policy pays off for the physician but there is nothing left to pay off your claim. once again your policy buys you control.

the bottom line is that every practitioner should have their own individual policy paid for by the practice. the practice should also have a group liability policy. if you have a claims made policy (by far the majority of policies issued) make sure that the tail is covered by your practice.

for what its worth anectdotally npps are being sued more often. in part this is due to pain and suffering limits. this is reflected in the increasing premiums.

david carpenter, pa-c

Trauma Columnist · Sep 23, 2008

The caveat to this David is that I wouldn't want the practice paying for my own insurance....they do cover me of course but I carry a separate private policy that they know nothing about. That way MY interests are covered.

ANPFNPGNP · Sep 23, 2008

I'll let Siri or one of the LNC's comment on the getting sued if you have insurance part. From what I've heard thats a myth. In my mind what your own insurance does is buys you control. Lets say that you have group coverage and you get sued. You don't want to settle. In most cases if you have your own policy then you control whether you settle or not. On the other hand it may be easier and cheaper for the owner to settle. After all they are not the ones that are listed in the national practitioner data bank for the rest of their life.
The other issue is what happens with limits. Lets say the practice has a $1/3 million policy. You and the doctor gets sued. The case goes to trial and you are each assessed $1million. The policy pays off for the physician but there is nothing left to pay off your claim. Once again your policy buys you control.
The bottom line is that every practitioner should have their own individual policy paid for by the practice. The practice should also have a group liability policy. If you have a claims made policy (by far the majority of policies issued) make sure that the tail is covered by your practice.
For what its worth anectdotally NPPs are being sued more often. In part this is due to pain and suffering limits. This is reflected in the increasing premiums.
David Carpenter, PA-C

David -

I've got a question. I know a NP who practices as an independent contractor in the nursing home setting. She got together with several docs and had them sign a contract stating that she would see their pts and she would bill for them independently, which she has and the docs haven't been getting a dime. Recently, one of the docs told her that he wanted a cut of what she collected or he was going to terminate the contract. He told her that she was a liability b/c she had gotten sued (she settled) and the pt's PCP also got sued. He said b/c of that, his malpractice insurance went up, even though he wasn't involved in any of this.

My question is, do you think his malpractice insurance premium really increased b/c the NP was sued, even though he had nothing to do with this?

Editorial Team / Admin · Sep 23, 2008

i'll let siri or one of the lnc's comment on the getting sued if you have insurance part. from what i've heard thats a myth. in my mind what your own insurance does is buys you control. lets say that you have group coverage and you get sued. you don't want to settle. in most cases if you have your own policy then you control whether you settle or not. on the other hand it may be easier and cheaper for the owner to settle. after all they are not the ones that are listed in the national practitioner data bank for the rest of their life.
the other issue is what happens with limits. lets say the practice has a $1/3 million policy. you and the doctor gets sued. the case goes to trial and you are each assessed $1million. the policy pays off for the physician but there is nothing left to pay off your claim. once again your policy buys you control.
the bottom line is that every practitioner should have their own individual policy paid for by the practice. the practice should also have a group liability policy. if you have a claims made policy (by far the majority of policies issued) make sure that the tail is covered by your practice.
for what its worth anectdotally npps are being sued more often. in part this is due to pain and suffering limits. this is reflected in the increasing premiums.
david carpenter, pa-c

couldn't agree more.

limits of liability is the key for many.

all malpractice insurance policies have limits of liability. 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 expense(s) for you.

Editorial Team / Admin · Sep 24, 2008

He said b/c of that, his malpractice insurance went up, even though he wasn't involved in any of this.
My question is, do you think his malpractice insurance premium really increased b/c the NP was sued, even though he had nothing to do with this?

David will probably come along and add to this.

In all group practices, two questions they ask are:

Do you employ or contract with any of the following healthcare providers:
Nurse Practitioners

Have any claims or suits every been made against you, your employees, or your organization out of the performances or professional services rendered or which should have been rendered by you or any person for whose acts or omissions you are legally responsible? If yes, indicate the number of claims and provide detail explanation.

So, it's conceivable that his premiums did go up if this NP had been sued in the past.

core0 · Sep 24, 2008

The caveat to this David is that I wouldn't want the practice paying for my own insurance....they do cover me of course but I carry a separate private policy that they know nothing about. That way MY interests are covered.

If the policy is in your name regardless of who pays the bill, then its your policy and you call the shots. If the policy is in the name of the physician or the practice then you don't call the shots. I have always picked the policy, had it written in my name and had the practice write a check for the policy. Never had a problem. This is a pretty common situation and I've never heard it being an issue. My last policy was running around $6k per year so that would be a pretty large payment with no real benefit (in my opinion).

David Carpenter, PA-C

core0 · Sep 24, 2008

David -
I've got a question. I know a NP who practices as an independent contractor in the nursing home setting. She got together with several docs and had them sign a contract stating that she would see their pts and she would bill for them independently, which she has and the docs haven't been getting a dime. Recently, one of the docs told her that he wanted a cut of what she collected or he was going to terminate the contract. He told her that she was a liability b/c she had gotten sued (she settled) and the pt's PCP also got sued. He said b/c of that, his malpractice insurance went up, even though he wasn't involved in any of this.
My question is, do you think his malpractice insurance premium really increased b/c the NP was sued, even though he had nothing to do with this?

Basically what Siri said. If I remember in the discussion about this particular practice, I commented that the physician would have to be an idiot to do this without compensation. This is exactly the reason. Collaboration or supervision denotes liability. Given the current nature of litigation in nursing homes this would be even more important.

The other issue is the referral of payment as a kickback. Payment for referrals is illegal. Payment for services rendered is legal. If the services are collaboration and referral (ie agreeing to see patients with more complex conditions) then its legal.

David Carpenter, PA-C

nursetim, NP · Aug 16, 2017

Marsh Professional Libaility insurance is less expensive than NSO by a lot of dollars. They also offer a 10% discount on you premium if you're an ANA member. However, the limits of liability is lower than NSO - $2M each occurrence and $4M annual aggregate. NSO is $1M each occurrence and up to $6M annual aggregate.

Apparently it's different in each state. In AZ the limits are 1,000,000/3 or 6,000,000.

nursetim, NP · Aug 16, 2017

I am shopping for malpractice as we speak. This is helpful: Don't Make These Mistakes When Buying Your Malpractice Insurance

Also consent to settle is a term I learned today. This means if the policy has a "consent to settle" clause, the insurance company can not settle without your consent and will go to trial. Some companies can settle without your consent. Now if there is a consent to settle clause there may also be a "hammer clause". The hammer clause is, if you exercise your consent clause and insist on on trial and lose, you would be on the hook for the difference between what the settlement would have been and what the judgement is.

LadyT618, MSN, APRN, NP · Aug 19, 2017

I am shopping for malpractice as we speak. This is helpful: Don't Make These Mistakes When Buying Your Malpractice Insurance
Also consent to settle is a term I learned today. This means if the policy has a "consent to settle" clause, the insurance company can not settle without your consent and will go to trial. Some companies can settle without your consent. Now if there is a consent to settle clause there may also be a "hammer clause". The hammer clause is, if you exercise your consent clause and insist on on trial and lose, you would be on the hook for the difference between what the settlement would have been and what the judgement is.

Interesting information. Thanks