Should I go under my employer's malpractice insurance coverage or get my own policy?

Nurse practitioners (NPs) can either purchase their own malpractice insurance or be covered under their employers' policies. If covered under an employer's policy, you'll need to ask some questions to determine whether the coverage is dependable and whether you need to purchase your own policy:

If working for a private practice, and you have been told you are covered under the practice's policy:

Ask "Am I a named insured?" If the answer is "yes," ask for a copy of the document for your files. If the answer is "no," ask how you will be covered if not a named insured.

Ask whether the policy requires any specific supervision of nurse practitioners by physicians.

Ask whether the policy is claims made or occurrence. If claims made, ask how much it would cost you to purchase a "tail."

Ask for the company's financial stability rating.

Know that most, if not all, of the companies which insure physicians are owned by physicians. Some of the companies have imposed restrictions on nurse practitioner practice, whereas there were none in the past. Some of these restrictions require physicians to supervise closely, or to be present when the NP is practicing. Some companies have raised rates when a physician employs a nurse practitioner. The companies can make their own rules regarding nurse practitioners, even if those rules "restrict the trade" of nurse practitioners.

If working for a government agency:
Ask whether you are protected under a Tort Claims Act.
If so, ask if there are any conditions under which you could be sued as an individual.

If working for a hospital or large organization
Ask whether the organization purchases a commercial policy or is self-insured
If a commercial policy, ask what the exclusions are; i.e. what are the circumstances under which you would not have coverage.
If the organization self-insures, ask if there are limits to what the organization would pay in the way of damages, attorney fees, and expert witness fees and whether any activities of a NP are not covered.

One cannot know how an insurance company will treat him or her until one is sued, and uses the insurance company's services. Nurse practitioners who have been sued often don't talk freely about this experience, so we have little hard or anecdotal data. However, an NP wanting to purchase insurance can get information on three aspects of a company's product. These are type of coverage (claims made or occurrence), cost and financial stability. Insurance companies' financial stability are rated by several companies, including A. M. Best.

There are several things NPs can do to sabotage their own planning.
First, if an insurance company offers different rates for pediatric nurse practitioners, family nurse practitioners and adult nurse practitioners, and you are a family nurse practitioner who is only seeing adults, you must purchase the family nurse practitioner coverage, unless you have a written statement from the company agreeing to your purchase of adult nurse practitioner coverage. If you are an FNP but purchase ANP coverage and are sued, the company may decide not to honor your policy, claiming that you misrepresented yourself on your application.

Second, if you are an NP working as an RN, many insurers will tell you to purchase the policy for NPs. If that is their requirement, then that is what you must do.

Third, watch the deadlines for payment.

Copyright 2006, Carolyn Buppert
This article is taken from The Green Sheet, published monthly from the Law Office of Carolyn Buppert. To order, click here.For more detail on avoiding malpractice, see "Avoiding Malpractice: 20 cases, 10 rules, 5 systems." To order, click here.

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