Defense expense benefits: which cover a portion of lost wages during a hearing, trial, or if the NP is named as a defendant License protection and occurrence-based coverage: if the policy was active when the incident occurred There may be differences in annual costs of individual policies, so it is important to compare coverage between different companies and select whichever one that offers the most comprehensive coverage and not just based on cost. If the NP is a business owner, they may want to consider more than just the above types of coverage and include asset protection. This type of planning protects the clinician from any claims made on one’s personal assets, such as their home, investment accounts, and other properties. When an NP is negotiating their contract, they should inquire as to how the employer plans to provide insurance for the NP, as well as pay the NPs portion of the premium. It is essential that every NP advocates for the same limits of liability as their physician and PA colleagues. By understanding coverage options and staying informed, healthcare professionals can practice with greater confidence and security. Malpractice insurance is a cornerstone of responsible practice. By investing time to select appropriate coverage and policy, NPs not only protect their careers, but also uphold the integrity of the care they provide.
Choosing the Right Coverage There are many factors to consider when selecting liability coverage. It is expected that employers will offer the same coverage to NPs as their MD and PA colleagues. This includes the same limits of liability. Typical coverage for aggregate insurance is a maximum of $1 million/3 million in aggregate that can be paid during the policy period, which is typically one year. There are two types of liability limits that must be considered whenever a clinician is choosing a policy: per claim (or per occurrence) and aggregate limits. Per claim is the amount that an insurer will pay for a single claim or incident. Aggregate limits are the maximum amount an insurer will pay for any claims filed during the policy period. Some key features of liability coverage include occurrence-based policies, claims-made policies, shared limits, and coverage gaps, as well as license protection, independent legal counsel, and portable coverage. While many of these terms may seem daunting, it is essential that every NP knows the intricacies of malpractice coverage to insure that they are carrying the appropriate amount of coverage. It is important for NPs to be prepared if an adverse action report or malpractice case is brought against them. Occurrence Insurance Occurrence insurance can be a smart choice—as this will provide seamless coverage for any incident that occurred while the NP in question was employed and insured, regardless of when the claim is filed. This provides protection even after a policy expires, as long as the policy is paid and current during the time of the incident. Occurrence-based policies tend to be more expensive than claims-made policies, though occurrence-based policies provide long-term coverage and security. The clinician is covered even after leaving that place of employment.
Courtroom Insider Professional Liability or Malpractice Insurance By Vanessa Pomarico-Denino, EdD, FNP-BC, FAANP Professional liability or malpractice coverage is essential when claims are filed against an NP for negligence or error. While it is rare, the rate of nurse practitioners named in a lawsuit between 2012-2021 was 3.9%. There is a myriad of reasons why a clinician gets sued—malpractice (improper practice or failure to provide professional services that results in injury, loss, or damage), or negligence (failure to act in accordance with standards of care, failure to follow up, refer, or disclose necessary information). One can be accused of negligence but if there is no injury, then there is no case that can prove malpractice. A clinician can be accused of malpractice if a patient incurs an injury caused by lack of knowledge, experience, or skill set. This includes exercising reasonable judgment or care, failure to diagnose, improper performance, and failure or delay in treatment. Research demonstrates that good patient/provider relationships yield better outcomes due to higher patient satisfaction with NP care. Despite our best efforts, knowledge, and experience, mistakes happen and having the appropriate coverage will help the NP avoid personal expense if they are named in a lawsuit. Data related to lawsuits against NPs demonstrates lower numbers as compared to the number of physician lawsuits, but the NP can still be named as a co-defendant in any malpractice case. Practicing in a full practice authority (FPA) state does not increase the risk of being sued.
Claims-Made Insurance Choosing a claims-made policy will only cover the NP while the policy is active regardless of when the incident occurred. If the NP leaves a place of employment, retires, or leaves the profession entirely, they will still need to purchase extended reporting endorsement or “tail coverage”—a policy that remains active in the event a lawsuit is filed even years after leaving practice. Employer-provided policies will only cover the clinician if they are acting on the employer’s behalf, and do not cover any personal injury or Good Samaritan Acts. These types of policies may not cover the NP for certain expenses incurred during a trial, such as lost wages and other personal expenses. Should an NP carry their own policy in addition to their employer coverage? If the NP works in an additional facility separate from their main job, or participates in any type of volunteering, consulting, or teaching obligations, it is typically recommended that they carry their own supplemental policy. Supplemental coverage will cover some of the expenses associated with a lawsuit. Self-insurance supplemental policies may not provide the same comprehensive coverage as employer malpractice insurance that is generally offered through local hospital risk management policies. There may be some overlap between the policies, but each policy may have coverage that the other policy does not provide. Individual coverage policies will typically include other aspects that employer-provided coverage does not. Examples include: Maximum claim coverage: the limits of liability that one is required to pay as a result of a professional claim against them in a medical lawsuit
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