What you need to know about professional liability insurance for clinicians
Whether you work as an employee in a large health system or a small private practice, you still need your own professional liability insurance policy, also known as medical malpractice insurance. Most hospitals and clinics offer some coverage for their staff. While it’s tempting to believe an employer plan provides sufficient protection, significant gaps and limitations in employer-provided policies make a personal professional liability insurance policy a critical investment for clinicians.
There are many reasons a personal medical malpractice insurance policy for clinicians gives you extra protection over your employer’s policy. Having your own policy ensures you and your license are covered if you’re ever named in an incident. In contrast to coverage under your employer’s policy, which prioritizes their entity, an individual professional liability policy represents your interests.
Relying solely on your employer’s policy could leave you vulnerable
Malpractice suits often take several years before they are fully pursued or resolved. An individual policy also ensures you remain covered if your former employer closes their business or merges with a new one.
Even if you don’t get named in a malpractice suit, you often need to provide past proof of insurance when you begin a new job or open a clinician-owned business.
Will Sullivan, executive vice president of CM&F Group, recalls a recent client who spent many years working for a multi-billion dollar health system that became insolvent. When he wanted to open a new physician associate practice, he couldn’t prove he was insured. “He has 10 years of risk, and he doesn’t know if the former business would cover any claims that arise,” says Sullivan.
The same can occur when an old employer merges with a new one. It can be difficult to retroactively prove you were covered by the employer’s policy when the organization changes.
“I always tell people that if they’re considering becoming entrepreneurs, make sure you have coverage individually because you do have people who will get nailed with a lawsuit as they’re opening up a new business, and you don’t want to be three years away from some incident that comes back to you,” he says.
Statutes of limitations vary in each state and depend on when an incident occurred. For example, an incident involving a minor might not trigger the statute of limitations until the individual reaches the age of maturity.
4 reasons every employed clinician should have a professional liability insurance policy
Coverage gaps in employer policies
Employer-provided policies typically prioritize protecting the organization’s interests. While they offer some protection to employees, their primary goal is to shield the institution from liability. This may leave gaps in coverage for the individual clinician, especially in cases where the employer determines it’s more cost-effective to settle a claim rather than fully defend a clinician.
Why it matters: Personal professional liability coverage protects your interests –– not just your employer’s.
Employer coverage doesn’t protect your side gig
Many healthcare professionals provide services outside their primary workplace, whether volunteering, moonlighting or giving informal advice. Employer policies usually only cover incidents that occur during the scope of employment.
Why it matters: If you’re involved in medical missions, part-time work or even providing advice to friends and family, you’ll want coverage that extends beyond your employer’s scope.
Legal defense costs aren’t always fully covered
Even when an employer’s policy provides some protection, it may not fully cover your legal defense costs. Many employer policies limit the amount they’ll cover for legal fees, leaving you responsible for the remainder. Additionally, your interests and those of your employer may diverge, leading to conflicts in legal strategy.
Why it matters: With personal professional liability insurance, you’ll have access to a legal defense team dedicated to protecting you rather than balancing your interests against the employer’s.
Coverage for licensing board complaints
Even if you aren’t at fault, many clinicians working in the field long enough encounter a licensing complaint. Employer-provided insurance policies often don’t extend to complaints filed with state medical boards. These complaints are costly and require a licensing attorney. They can lead to license suspension, fines or other disciplinary actions.
Why it matters: Personal liability insurance frequently covers legal representation and defense costs related to licensing board complaints, helping protect your ability to practice.
Many clinicians avoid personal professional liability insurance because they wrongly assume it’s too expensive. However, professional liability policies are often surprisingly affordable, especially compared to the potential costs of a lawsuit, legal defense or reputational damage.
Click here to learn more about getting covered.
