Everything You Need to Know About Nursing Malpractice Insurance

Nursing malpractice insurance is a type of insurance that provides nurses with protection when a patient (or their personal representative) brings legal action against them. These claims generally allege negligence or omission of appropriate care that leads to some type of injury, loss, or death. 
 
Though we tend to associate malpractice claims with physicians, the truth is that professionals in almost any field can be accused of malpractice, including nurses. 
 
No matter how diligent and meticulous your level of patient care is, you could still be named in a medical malpractice lawsuit. Being the subject of a claim does not mean that you are guilty of whatever the claim states, but defending yourself against a lawsuit is expensive. That’s why you should be aware of the risks and have an understanding of what nursing malpractice insurance is so that you can decide for yourself whether you need it.

Medical Malpractice Suits Are on the Rise

There are between 15,000 and 19,000 medical malpractice suits filed each year, and according to the National Practitioner Data Bank, the last few years have seen more Adverse Action Reports (AAR) and Medical Malpractice Payment Reports (MMPR) involving Registered Nurses than for any other category of healthcare practitioner.  

Nursing Malpractice Insurance Can Benefit a Variety of Nurses

Nurses working for a hospital or other type of facility are generally offered a substantial level of legal protection by their employers’ malpractice policy, but many individual nurses purchase individual policies to provide an additional layer of financial security and peace of mind. Independent contractors and Advanced Practice Registered Nurses operating their own practices also need to ensure that they have appropriate coverage.  

Individual nursing malpractice insurance is generally inexpensive. The average cost is about $100 per year, but like other forms of insurance, your actual premium price will vary depending upon what underwriters view as risk factors. 
 
Nursing Malpractice Insurance Cost Varies by:

• How many years of experience you have
• Your level of education
• The state(s) in which you work
• Your work setting
• How much time you spend on the job

Costs will also depend upon whether you choose a claims-made policy, or an occurrence-based policy (more on those later), with the latter providing more extended coverage at a higher price. 

Types of Claims Covered

The coverage provided by malpractice insurance policies differs from company to company, from type of practitioner or care setting, and by other variables, but most are crafted to cover claims involving:

• Bodily injury
• Property damage
• Medical expenses
• All types of personal injuries, including mental anguish 

Some policies will also offer additional benefits including:

• First-aid expenses
• Assault charges
• Incorrect advice
• Loss of income for attending trials or depositions
• HIPAA violations
• Slander and libel

Notably, there are limits to what types of claims nurse malpractice insurance will cover. Exclusions include dishonest or criminal acts and sexual misconduct, including sexual harassment claims filed by patients and situations involving reckless disregard on the part of the nurse.

How Much Will These Policies Cover?

Most policies provide up to $1 million in liability per claim but limit the total payout per insurance policy period to $6 million. 
 
The majority of nursing malpractice insurance payouts go to paying for attorneys’ fees, but a significant amount also goes to court costs, actual payment for damages (both compensatory and punitive), and to paying for the costs of arbitration and settlement.  
 
Nursing malpractice insurance also covers legal representation for complaints to the nursing board. This is particularly important because even if your employer’s malpractice policy protects you in a lawsuit, it will not provide the money you need if you face disciplinary charges from the board that put your license at risk.

There are two different types of nursing malpractice insurance policies available:

• Claims-made policies
• Occurrence policies

Understanding the difference between the coverage in each of these is important.  

Claims-Made Policies

A claims-made policy will cover claims for injuries only if the policy was in effect when both the treatment was administered and the claim was submitted. This type of policy is less expensive than an occurrence policy but leaves you vulnerable to claims submitted after your policy has expired.  
 
Nurses can purchase what is known as “tail coverage” to extend the coverage period for a specific amount of time after a claims-made policy has ended. The cost of tail coverage is often double the premium amount that was originally charged.

Occurrence Policies

An occurrence policy covers any claim for treatment that occurred while the policy was in effect, regardless of whether the policy has since expired.

Deciding whether you need nursing malpractice insurance is a personal decision. It requires a certain amount of due diligence as well as an assessment of your own peace of mind.  

For some people, it’s an important coverage to have, while others may not believe it is necessary. But as we’ll cover in the next section, it can be more necessary for certain types of nurses than others. 

What Types of Nurses Need Nursing Malpractice Insurance?

1.) Employed Nurses Who Want Additional Protection Against Claims Not Covered by Their Employer

Many nurses who are employees opt out of nursing malpractice insurance based on their assumption that their employer’s coverage will provide the protection that they need. This is often the case, and even in scenarios where a nurse has purchased an individual policy, the healthcare organization’s malpractice policy is considered the primary coverage. 
 
But, employer coverage does not generally cover:

1. Actions brought with the State Board of Nursing.
2. It also may not apply to information privacy actions, sexual misconduct, property damage, or assault/workplace violence.

This is becoming increasingly more important as claims against nurses to state boards of nursing are rising.

What to Do if You Are An Employed Nurse and Want to Check Your Employer’s Coverage

If you are employed, you are may want  to request a copy of your employer’s professional liability insurance policy to determine the extent of coverage it provides to you. 
 
Many nurses have discovered – too late - that their employer’s insurance did not apply to their actions outside the scope of your employment. Some have even found themselves without coverage for care they provided at their facility while not on duty, or with no coverage for work done as part of volunteer work on behalf of their facility. 
 
Understanding the extent of the personal liability coverage your employer extends to you will help you understand your exact degree of risk.

2.) Nurses Who Are Not Employees or Are Acting Outside of Their Scope of Employment 

Nurses who are not employees – or who are acting outside of the scope of their employment - most definitely need professional liability insurance since they aren't covered under their employer's policy.
 
This would include independent contractors as well as volunteers and students. It is also true for advanced practice nurses who operate their own clinics or practices.

Other Factors to Consider When Deciding Whether or Not to Get Nursing Malpractice Insurance

1. What Level of Personal Risk Are You Comfortable With?

While cost is always a consideration when deciding whether to purchase nursing malpractice insurance, most plans are relatively inexpensive, and worth the peace of mind that they provide. An even more relevant factor to consider is your personal level of risk for being the subject of a malpractice claim.

2. Do You Work in a High-Risk Specialty?

Nurses who are most vulnerable to these claims are those who work in high-risk areas of hospitals, including labor and delivery and the emergency department. 
 
It is also worth noting that complaints of negligence are far more likely to be filed against agency nurses, home health agency nurses, nursing home nurses, and independent duty nurses.  

Pros

• Peace of mind
• Enhanced protection against potential claims not covered by the facility’s policy
• Legal representation should a plaintiff file a complaint against you with your State Board of Nursing.

With the average medical malpractice claim paying out over $200,000, the investment of approximately $100 per year is probably well worth it.

Cons

• Unnecessary expense -  In most cases, a malpractice claim filed against a nurse will be covered by the insurance carried by the nurse’s employer.
• As for Board of Nursing complaints, the majority of these fail to reach the stage of having formal charges filed, which is the point where the malpractice insurance coverage first kicks in. Any expenses incurred prior to this stage will come out of the nurse’s pocket.

If you’ve decided to move forward with individual nursing malpractice insurance, you want to make sure that the policy you choose is worth the premium you pay. Make sure that the policy you choose includes:

1. License defense coverage, which pays the legal fees and costs of Board of Nursing complaints
2. Compensation for out-of-pocket expenses including travel, as well as for lost wages missed for hearings
3. Coverage for assault
4. First-aid expenses,
5. Violations of the Health Insurance Portability and Accountability Act
6. Libel of slander coverage
7. Property damage
8. Good Samaritan coverage

There are several reputable companies that provide nursing malpractice insurance, and choosing the best one for you depends upon your individual needs. The following list represents the top-rated companies in the industry:  

1. NSO (Nursing Service Organization)

NSO company exclusively provides malpractice insurance for nursing professionals, offering coverage for all levels of experience from students through Advanced Practice Registered Nurses with their own practices. Getting a quote from them is fast and easy, and they also offer additional types of insurance including life, disability, and dental. 

2. Berxi

This division of insurance giant Berkshire Hathaway distinguishes itself by providing legal defense outside of the liability limit that your policy provides, thus boosting the coverage provided. Nurses can manage their premium costs by opting for different deductible options. 

3. Proliability

Among the top-rated malpractice insurance companies across multiple industries, Proliability gets high marks for its customer service. They also offer attractive discounts based on membership in professional organizations and easy transition from student coverage to professional coverage.

1. Even if your employer has a facility-wide malpractice insurance policy, having your own, individual coverage can give you greater peace of mind and offer coverage not provided under a blanket policy.
2. The cost of an individual nurse malpractice insurance policy averages just $100 per year.
3. Nurses are increasingly being named as defendants in medical malpractice lawsuits, and having your own policy offers greater peace of mind, as well as coverage in case of a complaint to your State’s Board of Nursing.