If you work in healthcare in 2024, you’re more likely than not to face a licensing complaint and a medical malpractice claim at some point in your career. Licensing complaints and malpractice claims aren’t uncommon, regardless of a provider’s commitment to quality of care. This is especially true for nurses and nurse practitioners in high-risk specialties more prone to malpractice claims, such as those in OB/GYN and emergency medicine.
The same incident can lead to a licensing complaint and a medical malpractice claim, or you may face only one or the other. Your employer may provide professional liability insurance to cover licensing complaints and malpractice claims, but it’s important also to get your own policy that prioritizes your needs.
Understanding the difference between the two is important for knowing how to respond and ensuring you have the right insurance coverage to protect you from both.
Defining the terms: licensing complaint vs. malpractice complaint
A licensing complaint and a medical malpractice claim can significantly impact your career, but they differ in focus, process and consequences.
What is a license complaint?
License complaints are formal allegations filed with a state medical board or regulatory authority, often by patients, colleagues or external agencies. These complaints typically focus on professional or ethical violations, including the following:
- Improper prescribing practices
- Unprofessional conduct, including sexual misconduct
- Failure to comply with state or federal regulations, including working outside the scope of practice
- Documentation errors
Licensing complaints can come from your employer, so it’s important to have a policy that prioritizes your needs.
Process and consequences of a licensing complaint
License complaints are reviewed by the medical board, which may initiate an investigation. Even though the board is not a court, you’ll still need legal counsel to defend you in the case of a licensing complaint, such as a nurse attorney. Attorney fees that quickly add up are one of the many reasons providers need medical malpractice insurance to cover a licensing complaint.
If substantiated, disciplinary actions for a licensing complaint can include:
- License suspension or revocation
- Probation or fines
- Mandatory corrective measures, such as additional training
You can face a licensing complaint even if no patients are harmed.
What are malpractice claims?
Malpractice claims arise when a patient alleges a provider’s negligence caused harm. Even if the claim is unfounded, it can quickly become expensive.
Common malpractice claims include the following:
- Misdiagnosis or delaying a diagnosis
- Abuse
- Failure to treat
- Prescription drug errors
- Failure to obtain informed consent
Legal process and outcomes
Malpractice claims typically involve a legal process that may result in financial settlements or court-ordered judgments.
Unlike license complaints, malpractice claims hinge on demonstrating that the provider’s actions directly caused patient harm.
Key differences between license complaints and malpractice claims
How license complaints vs. malpractice claims impact providers
Even minor complaints can lead to time-consuming, expensive investigations and potential restrictions on your ability to practice. They can also harm your reputation if reported publicly.
A malpractice lawsuit not only puts your finances at risk but also challenges your professional competency, potentially eroding patient trust.
Both scenarios underscore the importance of adhering to best practices in patient care and having professional liability insurance..
Insurance to cover license complaints and malpractice claims
Managing the risks of both license complaints and malpractice claims requires a comprehensive insurance strategy. Here’s what to consider:
Malpractice insurance, also called professional liability insurance
Malpractice insurance protects you from lawsuits alleging negligence, errors or omissions in patient care. Less expensive coverage with a high deductible or limited coverage can become more expensive in case of a claim.
Ask your insurance advisor about the following:
- Coverage limits: Ensure your policy covers legal defense costs, settlements or judgments.
- Occurrence vs. claims-made policies: Occurrence policies cover incidents during the policy period, even if the claim is filed years later. Claims-made policies only cover incidents during your policy coverage if the claim is made while the insurance policy still covers you.
- Defense costs: Confirm whether the policy has any limits on legal defense costs.
General liability insurance
While not specific to malpractice or licensing issues, general liability insurance protects against non-medical risks, such as slip-and-fall incidents on your property. If your practice has a physical location, this coverage is essential.
Cyber liability insurance
Cyber insurance protects you against related costs and claims if a data breach leads to a patient claim.
Not having a professional liability insurance policy makes malpractice claims and licensing complaints exponentially more difficult and costly. Not only does this insurance help cover the costs of legal representation and protect your financial stability during the process, but your provider will also help you navigate the process.
Learn more about CM&F Group professional liability insurance that covers licensing complaints and malpractice claims.
