"Plaintiff attorneys only go after the doctors… not the nurses." Have you heard this before? While that may have been the case in the past, today's healthcare liability landscape is changing and the risk for allied providers is increasing more and more. As the scope of practice for midlevels continues to expand, the liability grows, as well.
So what’s the best way to insure your Nurse Practitioner, Physician's Assistant, RN, Aesthetician, etc? And what options do you have if you're a midlevel provider working independently? In this article we’ll address these questions and more to help you understand malpractice insurance for allied providers.
Coverage under the Supervising Physician
Most malpractice insurance carriers will allow Registered Nurses, Medical Assistants, Aestheticians, Therapists, X-Ray/Ultrasound/Surgical Techs, and other medical staff to be covered under their supervising physician at no cost; however Nurse Practitioners, Physician’s Assistants, CRNAs, Midwives and other providers with a larger scope of practice are often excluded.
While it’s beneficial to have this shared limit option available, keep in mind that shared limits means just that – the policy limits are shared among everyone under the policy. So, if a physician has a $1M policy limit and a claim names him/her, their RN, the medical assistant, and their receptionist, everyone shares the $1M in coverage.
This shared limit option also generally limits the coverage to work done on behalf of the employer; so a RN would not be covered for any moonlighting or outside work – only that work done within the scope of their duties for the supervising physician or employer.
When an allied provider leaves a practice, they usually do not need to purchase tail insurance, since they were sharing the policy with their supervising physician; however, it is the supervising physician’s duty to maintain continuous coverage and take care of the tail insurance at some point in the future (unless it is Occurrence coverage). Talk to your malpractice insurance agent to find out what tail obligations you have with your policy.
Pros: No cost; Easy way to cover most of your staff
Cons: Only certain types of allied providers can be covered; Shared limits; Tail considerations
Coverage under the Employer/Corporation
Corporate malpractice insurance coverage provides a wider range of protection for allieds in a group. Most malpractice insurance carriers allow all classes of allied professionals to be insured under the corporate policy. This is beneficial to the physicians, because they are no longer sharing their individual policy limits with their staff; but rather, it provides a separate set of limits to cover the entity itself and all non-physician staff working under it.
Corporate malpractice insurance costs are nominal. For a single physician practice, the corporate malpractice insurance is generally 10% of their individual premium. For groups, the corporate cost is around 10% of the top 5 physicians’ premiums combined (often a maximum premium threshold applies).
The corporate malpractice insurance policy extends coverage on a shared limits basis and coverage is generally limited to the acts done within the scope of employment. When an allied provider leaves a practice, they typically do not need to purchase tail insurance, since they were sharing the policy with their employer; however, it is the employer’s duty to maintain continuous coverage and take care of the tail insurance at some point in the future (unless it is Occurrence coverage). Talk to your malpractice insurance agent to find out what tail obligations you have with your policy.
Pros: Carves out the allied providers so no eroding of the physician’s policy limits
Cons: Shared limits; Tail considerations; Cost (although minimal)
It is also possible for allied providers to secure their own individual malpractice insurance. This option provides more coverage than a shared limit option, since the individual provider has a policy all to themselves. The group may control the policy or the individual provider may choose to pay for it on their own. An employer-controlled policy often means that the coverage will be limited to only the work done for that employer. Midlevel providers that work as independent contractors, 1099 employees, or locums may want to carry their own policy to have the flexibility of managing their own coverage and working wherever they want.
Individual policies will have a premium cost, although there are often discounts available for those working part-time.
Pros: Separate coverage; No eroding limits for physician, corporation or other providers in the group; Allows provider to go anywhere and work where they want; Usually one policy can cover all activities
What Coverage Option Is Right for You?
So how do you decide which coverage option is right for you? It depends on several factors including the state you’re practicing in, budget, and your risk tolerance.
For small, start-up practices, shared limits coverage is common. It’s an economical way to extend coverage to the midlevel providers in the group, while the number of exposures is relatively low. As the practice grows and expands, however, it is wise to consider separate coverage options to spread out the risk so not to exhaust limits. It’s also important to be cognizant of the policy limits, particularly for shared limits policies. A corporate malpractice insurance policy sharing $1M in limits is very different than a corporate malpractice insurance policy sharing $200,000 in limits.
State nuances, hospital requirements, and other factors may also affect the type of coverage option that you’ll select. In Indiana, for example, the Patient’s Compensation Fund requires that all Independent Ancillary Providers (IAPs) carry their own individual malpractice insurance, unless they are employed by a hospital or nursing home. This includes Dentists, Psychologists, Podiatrists, Optometrists, Nurse Practitioners, Nurse Midwives, Certified Registered Nurse Anesthetists, Physician’s Assistants, and Clinical Nurse Specialists. These providers cannot share limits with a physician or a corporation. They must be separately insured.
Deciding on the right form of malpractice coverage for allied healthcare providers may seem difficult, but there are experts available to help you talk through options. A knowledgeable malpractice insurance agent can simplify the process for you and explain all available coverage options so that you can find the malpractice solution that’s right for you.