Why Medical Malpractice Insurance is Important

IN A NUTSHELL:

• Medical malpractice insurance is important for all healthcare providers
• Physicians, nurses, EMTs, and anyone in healthcare should carry a policy
• Not all states require physicians to carry medical malpractice insurance

Medical malpractice insurance, also known as professional liability insurance, is a well-known term in the healthcare industry yet its full scope of coverage and importance is often misunderstood.

At its core, medical malpractice insurance covers physician liability which arises from disputed healthcare services that resulted in the death or injury of a patient.

According to the American Medical Association, the only states which require all physicians secure a minimum level of medical malpractice insurance are Wisconsin, Kansas, Rhode Island, Massachusetts, Connecticut, New Jersey, and Colorado.

While it may not be required by state law, many hospitals and other healthcare facilities often mandate physicians carry some level of medical malpractice insurance. This also holds true for any type of healthcare provider or anyone that provides direct or indirect patient care, such as nurses, dentists, optometrists, psychologists, pharmacists, and physical therapists.

Types of malpractice insurance:

Claims-made: Many insurers write on a claims-made form basis where a policy in effect at the time a claim is reported responds for the loss, while the policy remains in force and during any applicable extended reporting period.

Occurrence-made: This policy was more popular in the past. It covers a loss that “occurs” during the policy period, regardless of when the claim was made, and even after the policy has been canceled.

What a malpractice insurance policy covers:

Healthcare providers are personally responsible for paying any damages that exceed insurance policy limits in the event that there are any claims or judgments made against them.

Most malpractice insurance policies offer two ranges of coverage. The maximum amount the insurance company will pay per claim during the policy period, which is usually one year, ranges from $100,000 to $300,000. The maximum amount the insurance company will pay for all claims during the policy period usually ranges between $1 million to $3 million.

How COVID-19 impacted medical malpractice insurance:

The COVID-19 Pandemic reinforced the importance of medical malpractice insurance for all types of healthcare providers with the strain on available workforce. With medical facilities of all sizes overwhelmed with the volume of people seeking care, nurses often attended to patients in various stages of care, highlighting their need for medical malpractice insurance.

However, there are common myths involving nurses and what is covered under a professional liability insurance policy:

MYTH: Only physicians get sued for malpractice
Healthcare facilities are recognizing the individual contributions of all their workers, not only physicians. With that recognition comes individual accountability, which includes the possibility of nurses being sued for malpractice based on individual actions.

MYTH: Healthcare workers can only be sued for mistakes
Anyone can be sued if someone believes they are responsible for a negative or undesired patient outcome regarding treatment—no matter if the belief is unfounded. A healthcare professional can also be sued by a patient who has not experienced damages and only hopes to win a settlement—despite the lawsuit having no basis. Regardless of whether or not a lawsuit has merit, expenses are incurred through the dismissal process. An individual malpractice insurance policy can protect against the financial ruin that can result from being sued while providing peace of mind.

MYTH: Nurses don’t need their own insurance because they are covered under their employer’s policy
Most nurses who rely on coverage provided by their employer never look at the policy itself or question its coverage. Unfortunately, there can be unexpected surprises when there are gaps within the policy and not all risks are covered. For example, if a lawsuit concerns an incident outside the scope of a job description, the employer has a legal right to refuse defending the nurse. This can be especially concerning as nurses across the country take on more responsibilities.

Another factor to consider is an employer policy protects a nurse only while they are at work. If a nurse were to provide their services outside of their job, even as a volunteer or a favor to a neighbor, they need to have their own professional liability policy for coverage. Good Samaritan laws only provide protection in emergency situations.

It is important for any healthcare professional, no matter their job functions and scope of practice, to consider the risk and liability involved with their profession and choose a medical malpractice insurance policy that is right for them.

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