Do Nurses Need Malpractice Insurance? FAQ
Once you begin your nursing career, it’s only a matter of time before you ask yourself this question: Do nurses need malpractice insurance? If you work directly with patients, the answer is yes. You can have a legal claim made specifically against you or be among the list of people named in a lawsuit against a facility.
Nursing malpractice insurance provides nurses with legal help in the event a claim is made against them, and can cover the cost of defense fees, settlements, and lost income due to time spent attending a trial or pretrial depositions. When you purchase insurance, the policy will usually protect you for a specific time frame, but policies vary, so it’s important to read the fine print so that you’re choosing a plan that’s right for your situation.
Malpractice insurance is inexpensive considering the large amount of money it can save you. Generally costing under $100 per year for nurses, most plans cover up to $1,000,000 per claim. Although many scenarios are covered, there are a few exceptions.
Read on to learn more about what is and isn’t covered in nursing malpractice insurance, categories of insurance, and what happens if you’re uncovered when a legal claim is made against you.
What Does Nursing Malpractice Insurance Cover?
Do nurses need malpractice insurance in every work environment? It depends on your scope of practice and where you work. Read the fine print or consult a healthcare attorney to make sure the coverage is enough for your needs based on your work environment. Examples of incidents typically covered by nursing malpractice insurance include:
- Improper performance of a treatment
- Failure to follow facility policies
- Failure to provide a safe environment
- Improper medication administration
- Failure to monitor a patient
- Failure to adequately assess a patient
- Acting out of scope of practice
What’s Not Covered?
Do nurses need malpractice insurance for non-medical incidents? In some of these cases, you could be held accountable regardless if you’re insured. An example of an incident not usually covered by nursing malpractice insurance can include sexual misconduct or harassment.
What Does Nursing Malpractice Insurance Cost?
Although the average cost of malpractice insurance is about $70 per year, the cost can vary based on:
- Your years of experience
- Your education level
- Your work setting
- The state in which you work
- How much time you spend on the job
Do Employers Provide Nursing Malpractice Insurance?
Some employers, especially hospitals, have malpractice insurance covering all their employees. If you’re comfortable with your employer’s policy, purchasing your own may not be necessary.
You may be wondering, Do nurses need malpractice insurance even if their employer provides it? It’s up to you. Having your own coverage may be a good idea, especially if the cost is low. If the facility changes its malpractice coverage during the course of your employment, or if the claimant’s damages exceed the malpractice policy limits, there may not be sufficient funds for your malpractice suit. Depending on the terms of a malpractice policy, a healthcare facility may also be able to revoke an employee’s malpractice coverage if the claim involves an employee who failed to adhere to the facility’s policies.
Types of Malpractice Insurance
When asking yourself, Do nurses need malpractice insurance? it’s understandable to wonder about what types are available. There are generally two main categories of nursing malpractice insurance: claims-made and occurrence policies.
Occurrence policies protect you from incidents that happened during the policy period, regardless of when a claim was made. Even if the claim was made decades later, the insurance company will protect you as long as the incident occurred while you had their coverage. The long-lasting coverage regardless of when a report is made is why occurrence policies tend to be more expensive than claims made policies.
A claims-made policy protects you when both the incident and report are made during the policy period. Unlike occurrence policies, you are not protected if a claim is made after the policy expires. The lack of protection if a report is made outside of the policy time frame is why this coverage tends to be less expensive than occurrence policies.
Tail coverage, also known as an extended reporting period, is an add-on to claims-made coverage. It extends protection after the policy expires. If a nurse purchases tail coverage on top of her original claims-made policy, she is covered even if the report was made well after the incident. Some tail coverage policies last a lifetime while others last a set number of years. Generally, adding tail coverage will double the price of the claims made policy.
Nursing Malpractice Insurance Scenarios:
Why do nurses need malpractice insurance even after they’ve stopped working as a nurse? Check out what the difference between occurrence policies and claims-made policies looks like in these three examples.
Occurrence Policy Example
A nurse buys coverage lasting from 2016–2017 for $200 per year. The nurse doesn’t renew that policy after 2017. In 2020, a claim is made against that nurse for an incident that occurred in 2016. That nurse remains protected. Although the claim was made after the policy period ended, the insurance company will still assist this nurse because the incident occurred while she was covered by their policy.
Claims-Made Policy Example
A nurse buys coverage lasting from 2016–2017 for $100 per year. The nurse doesn’t renew that policy after 2017. In 2020, a claim is made against that nurse for an incident that occurred in 2016. The nurse is not protected. Although the incident occurred during the policy period, the insurance agency won’t protect the nurse because the report was made after the policy period ended.
Tail Coverage Purchased on Top of a Claims-Made Policy Example
A nurse buys coverage lasting from 2016–2017 for $300 per year. The nurse doesn’t renew that policy after 2017 but purchased tail coverage lasting five years. In 2020, a claim is made against that nurse for an incident that occurred in 2016. This nurse is protected. The year 2020 is within five years of the policy ending date; therefore, it’s still within the tail coverage time frame.
How to Obtain Malpractice Insurance
Even if the facility provides malpractice insurance, many nurses still obtain their own malpractice insurance for added security. Do nurses need malpractice insurance to be purchased from a specific source? No — a Google search will yield multiple options that can be bought online.
What Are the Benefits of Malpractice Insurance?
Here are some reasons why you might consider having your own insurance:
- It can protect you from paying large sums of money in the event a report is made against you
- Peace of mind
- It can protect your nursing license from disciplinary action that could impact your ability to work
- It can provide protection even if you’re dropped from your employer’s policy
What Are Some Drawbacks of Additional Nursing Malpractice Insurance?
- There are plaintiffs whomay be more likely to continue pursuing a lawsuit against an insured nurse because they know the insurance company can provide the money they’re seeking.
- Some employers may defend nurses under the company insurance policy, then sue the nurse to recoup their losses because they know the insurance company can pay.
- You may have a false sense of security if you don’t know the details of your policy. Unfortunately, some nurses don’t find out their specific situation wasn’t covered by their insurance plans until it’s too late.
What Can Happen Without Malpractice Insurance for a Nurse?
- You could be liable for thousands of dollars in a lawsuit.
- Your nursing license and job prospects could be encumbered.
Additional insurance on top of what an employer provides is up to your discretion. Extra protection in case you’re unable to access your employer’s resources can’t hurt so long as you can pay for it. It’s always best to check with a licensed attorney if you have additional questions.
Put the Focus on Your Career
After reading this article, you hopefully have a better answer to the question, Do nurses need malpractice insurance? Looking for more ways to invest in yourself and your career? See how IntelyCare can keep you up to date on the latest nursing job opportunities in your field.
Legal Disclaimer: This article contains general legal information, but it is not intended to constitute professional legal advice for any particular situation and should not be relied on as professional legal advice. Any references to the law may not be current as laws regularly change through updates in legislation, regulation, and case law at the federal and state level. Nothing in this article should be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed to practice in your jurisdiction.