Massachusetts Nurse :: November/December 2005

Does your employer provide enough liability insurance coverage?
Why you need to know and how to fix it

“The need for nurses to carry their own individual professional liability insurance policy is imperative,” says Dorothy McCabe RN, MS, M.Ed., and director of nursing and career services for the MNA. Since 1996, the MNA has endorsed the individual professional liability insurance policy administered through the Nurses Service Organization (NSO) and underwritten by American Casualty Company of Reading, Pa.

Hospitals and clinics have been downsizing, forcing a reduction in their nursing staffs and potentially leaving a nurse practicing in a dangerous environment with too many patients and increased responsibilities as a result.

”Whether you are relying on your employer’s coverage or have no coverage at all, you should ask yourself some very important questions,” adds McCabe, an NSO policyholder. “First off, ask yourself if you should purchase your own policy rather than depend on your employer. Unlike employer’s policies, the policy available through the NSO—which is accessible to nurses and nurse practitioners nationwide—will provide you with license protection for your defense of disciplinary charges in addition to defendant expenses.

According to McCabe, other questions that nurses should be asking as they consider the issue of professional liability insurance include the following:

Do I have enough coverage?

All professional liability insurance policies include limits of liability that consist of an amount of coverage per claim and a total amount of coverage (or aggregate) for all incidents during a specific time period. But remember, if your employer’s policy covers you, then it likely covers other employees as well. This means that other defendants may share your liability limits and the money available to pay malpractice awards may be diluted if they are also named in a lawsuit.

If you are named in a malpractice lawsuit and the total costs surpass the limits of your employer’s coverage, you may be required to pay the difference out-of-pocket. With the policy available through the NSO, you are covered for up to $1 million each claim and up to $6 million aggregate, and the policy is your own.

What expenses are covered?

If you’re a defendant in a lawsuit, you may face many unexpected expenses. If your employer’s insurance only covers liability settlements, defending yourself could cost thousands of dollars in lost wages and other out-of-pocket expenses—even if you win. The policy offered by the NSO covers you beyond the malpractice awards because the policy includes additional coverages, like legal defense, defense representation for covered claims and additional coverages (explained below) at no extra cost.

How are attorney costs managed?

While most, if not all, individual malpractice insurance policies will provide you with an attorney to defend you against allegations of malpractice, some policies may deduct these defense costs from your limit of liability. This practice will obviously leave you with less money to pay for any judgment against you.

Once you file a claim with the NSO, all necessary information will be forwarded to CNA. Subsequently, CNA will assign your case to a claims consultant; promptly contact you to discuss the issues; appoint defense counsel to represent you personally; and, when necessary, supervise counsel’s representation—all while keeping you informed every step of the way. Legal fees will be paid for covered claims in addition to your limits of liability, regardless of whether you win or lose in a lawsuit, or if it even goes to trial.

As the program administrator, the NSO manages all processing of the initial notice of an incident or claim from its customers. NSO also handles the marketing and customer service for the nurse’s professional liability insurance program. CNA, being the underwriter of the policy (or the insurance carrier) assumes the liability when a claim is filed.

What if I am deposed?

In almost all cases, there will be court proceedings prior to the actual malpractice trial. A deposition, also known as “discovery,” is a court-sanctioned hearing in which all parties participate in a formal question-and-answer session to find out information relevant to the lawsuit. If you have been named in a covered lawsuit as a defendant, CNA will ensure that you are prepared for the discovery phase of the suit.

There may be a situation where you are not named in a lawsuit but you are deposed for a suit against your employer or a co-worker. If you are required to appear at a deposition that arises out of professional services, the policy available through NSO will reimburse you up to $5,000 aggregate, up to $2,500 per deposition for attorney’s fees.

What about lost wages?

If sued or deposed, you will be attending both pre-trial proceedings and your actual case in court. This could involve you taking time off from work and traveling to wherever your case is being adjudicated. The policy offered through NSO reimburses you up to $10,000 aggregate for lost wages and covered expenses incurred while you attend a required trial, hearing or proceeding as a defendant in a covered claim.

Is my license protected?

Another significant risk that nurses could face is the suspension or withdrawal of their license. Without your license, you lose your ability to work. Because any medically related complaints must be investigated by your state licensing board, coverage that will provide you with a means to secure experienced legal representation and reimbursement of out-of-pocket expenses is a vital benefit to have. Employers rarely provide license protection.

With the coverage available through the NSO, license protection coverage is included. This coverage reimburses you up to $25,000 aggregate, up to $10,000 per proceeding, for your defense of disciplinary charges and other covered expenses arising out of a covered disciplinary action against your license.

What else is covered?

In addition to the individual malpractice benefits, the professional liability policy offered through the NSO provides additional coverage extensions you would not likely see through your employer’s coverage. Again, this is at no extra cost. What are these additional benefits?

• Personal liability protection: You’re covered up to $1 million aggregate (depending on the limits you choose) for liability damages for covered claims resulting from incidents at your residence that are unrelated to your work.
• Medical payments: Pays up to $100,000 aggregate, up to $2,000 per person, for reimbursement of medical expenses to others injured at your residence or on business premises.
• Personal injury protection: Protects you, up to the applicable limits of liability, against covered claims arising from charges of privacy violation, slander, libel, assault and battery, and other alleged personal injuries committed in the conduct of your professional services.
• Damage to property of others: Pays up to $10,000 aggregate, up to $500 per incident, for damage caused accidentally by you to the property of others at your residence or workplace.
• Assault coverage: Covers your medical expenses or reimburses you for damage to your property up to $25,000 aggregate, up to $10,000 per incident, if you are assaulted at work or while commuting to and from your workplace.
• First aid benefit: Reimburses you up to $2,500 aggregate for expenses you incur in rendering first aid to others.

Not all malpractice policies are created equal. Your employer’s policy may not cover you for all things related to your job and certainly may not provide coverage for incidents that occur away from work. If you are currently covered by another policy, compare your benefits with those listed above to see what’s missing. You may be surprised by how policies differ from each other.

The most compelling reason for protecting yourself with your own individual professional liability insurance policy is the peace of mind that comes with knowing your best interests will be served if you are ever sued.

For more information call 800.247.1500 or visit www.nso.com/massnurse.