When most nurses think of the hospital’s malpractice insurance, they assume the hospitals insurance will protect them fully. However, it is important for nurses to understand that since they can be named in lawsuits as well, they are better protected if they have their own liability insurance policy. Nurses can face claims for a host of reasons including an omission leading to the death, injury or loss of the patient, failing to properly assess patients, failing to convey important patient information, not staying within the scope of practice, medication errors, not following orders as prescribed, etc. These individual claims aimed at the nurse would potentially raise the individual liability of the nurse thus requiring more accessible insurance monies for the individual RN. 

“One might think that a hospital or health system would offer full protection should a nurse be accused of wrongdoing,” said Judith Cutchin, RN. “While understandable, this assumption is not entirely accurate. If a healthcare worker is named in a lawsuit, the hospital’s malpractice insurance may not necessarily fully cover them.”

First and foremost, the employer’s malpractice insurance acts in the interest of the employer. There are occasions when the employer and the employee’s interests are aligned and there are times when their interests diverge, for example, when the individual nurse has been found to have committed an intentional tort, such as, a battery When nurses have their own insurance, they enjoy a greater level of protection. Moreover, everyone in a high-risk position deserves the peace of mind that insurance can provide.

Malpractice insurance protects individual healthcare providers as well as institutions from claims brought by patients, or a patient’s representative.  Some malpractice providers offer attorney services for cases filed against a nurse at The State Board of Nursing, however, this benefit is never provided through a hospital’s malpractice insurance, but rather only through an individual RN’s insurance. Healthcare professionals work hard to obtain a license; and should therefore do everything possible to protect it.

Moreover, at the start of the pandemic, many hospitals and health system employers relaxed some policies and rules. They did this to ensure they could address the surge in patients brought on by the pandemic. While rules may have been relaxed, that doesn’t necessarily protect a healthcare professional in the event of a negligent action. 

The Fine Print

Even if a hospital or health system assures nurses that they are covered under the employer’s policy, it is important to understand the fine print of various types of malpractice insurance policies. Additionally, one should understand if the type of insurance coverage provided by the employer would cover them while currently employed, and/or when they leave their employment.

Why This Matters

When a person is named in a lawsuit, they may be liable for a percentage of the claim. All adjudicated wrongdoers can be held accountable for the whole amount of the judgement. When a jury comes down with the total judgement amount, the plaintiff may be able to collect 100% from any one of the defendants. Nurses have been told to rely on hospitals insurance because the hospital will totally cover them. But blind trust is rarely advisable.

What Kind of Coverage is Available?

There are three types of malpractice insurance - occurrence, claims-made, and tail insurance. Claims-made policies cover any claim made during the policy period in which a policy was purchased. It is not unusual for there to be a delay between when an event occurred and when the claim is made. If a policy is active, it will provide protection accordingly.

Occurrence polices provide coverage for life, but only if the coverage was active and payments were made on the day the malpractice was committed regardless of when the malpractice action was filed.

Tail coverage provides an extended reporting period. It covers healthcare professionals for the time frame when one is no longer working as a nurse. Since the statute of limitations for lawsuits can be up to 10 years after the malpractice has been committed, this type of insurance can be helpful. It is an addition to a claims-made policy and extends coverage for incidents that happened during the policy period – but a claim was not made until after the policy expired or was cancelled.

It bears noting that there is a theory of liability called vicarious liability; that if the nurse is sued, the hospital will also be sued because the nurse is acting in the interest of the hospital. This legal theory of liability suggests that the hospital guarantees payment for the wrongful actions of the nurse. But if the nurse has been found guilty of an intentional tort (battery, intentional infliction of emotional distress, falsification of business records, etc.) the insurance will not cover the claim. Insurance companies generally only cover unintentional torts, such as negligence, wrongful death, abandonment, lack of informed consent, etc.

Worth Noting

If you are relying on the hospitals insurance policy, a hospital goes bankrupt and a lawsuit is filed after they close, the amount and availability of coverage is questionable. Each defendant may be held personally liable. This is yet another reason individual malpractice insurance is recommended for healthcare professionals.

Is it Mandated?

Since malpractice insurance is so important, shouldn’t states mandate it for nurses? Malpractice insurance is not mandated for nurses under state law. While many nurses believe insurance is important, many also believe their employer will cover them in the event of a lawsuit. But this is a risk one need not take.

How much will I have to pay for individual insurance?

A nurse could expect to pay from $200 up to $1000 per year for insurance. For more information contact education@nysna.org.

If a hospital goes bankrupt and a lawsuit is filed after they close, no one is covered by insurance.