All About Malpractice & Professional Liability Insurance for Nurses: The Pros AND the Cons

If there is a professional practice (i.e. "legally topic") question I get more than "Is it true 'if it wasn't charted, it wasn't done," it's gotta be "Do I need malpractice insurance?" Nurse malpractice insurance is an important — and surprisingly polarizing — subject in the nursing community. Some see it as a necessary evil for nurses – something that's just part of being in the profession. Others avoid it: "You're more likely to be named in a lawsuit!!" 

So, who am I, and why do nurses ask me these questions? I'm a nurse. I also serve as an expert witness in birth injury malpractice cases for the past 8 years. I've reviewed around 300 cases and read over 1000 nurse depositions. How the legal system works and impacts nurses is something I think a lot about. And it's something many nurses come to me for information on. So here is the lowdown, based on my experience and the available resources.  

This comes with a caveat: this is an extremely challenging thing to research. Most, if not all, the available information online on this topic is either written by companies selling malpractice insurance or folks with financial ties to insurance companies. The same goes for nurse influencers on social media. 

Do I need nursing malpractice insurance?

While everyone is looking for a black-or-white answer, there are plenty of misconceptions about nursing malpractice insurance, particularly when it comes to whether nurses need coverage, what it will actually get you, and when it comes into play. You have to decide for yourself: what is your risk level and will this bring you peace of mind in your career. I will not be responsible for this decision. Stop listening to any nurses who say you absolutely should or shouldn't. Let's take a look at liability insurance and how to decide if it's right for you.

What is nurse malpractice and liability insurance?

Professional liability or malpractice insurance helps cover you against personal claims of violating the standard of care made by you as a nurse, whether in a civil lawsuit or with your state board of nursing.

How many nurses are personally sued each year?

It is VERY HARD to get a clear answer on this. A wide range of numbers are reported, from one hundred to thousands of nurses per year are sued and that number is suspected to be rising. One challenge is that while nurses may be named in a complaint ("sued") they aren't identified as the financially responsible party…they are named as agents of their employer. The other challenge is that folks with a vested interest (the insurance companies who sell insurance to nurses) do report these numbers as though the nurses are the financially responsible ones. My best guess: it's in the very low hundreds. In my 300 cases with over a thousand nurses involved/named/what have you, none had personal insurance and none were being individually sued outside of their relationship with their employer. Just by numbers, I would think there would have been at least a couple if it was a widespread problem.  

Is the number of nurses being sued going up?

It does seem like there is an upward trend, according to all reliable reports. But why is that? Primarily because nurses are working in increasingly independent and entrepreneurial endeavors, like aesthetics, IV infusions, and coaching. Outside of this, home health and hospice make up a large portion of the rest of the claims. Inpatient hospital nurses, although they may be involved in lawsuits and have their care questioned, are the least likely to be individually named and liable in a malpractice lawsuit. But with the average payout of these lawsuits around $250,000 and the average legal cost to defend a license with the state board of nursing being about $5500, it's not something to dismiss. 

What can nurses get sued for?

This is the real question beneath the “Do I need malpractice insurance?” question. It’s because many nurses have a fear, instilled since probably nursing school, that you can do something totally unintentionally, kill someone and lose your license/job/houe/everything.  Which does feel scary. But as we’ll discuss below…you are almost always considered an agent of your employer.

But in short: any failure to meet the standard of care that more likely than not led to a patient injury (if all those words were confusing, I go in-depth with the whole lawsuit process here. ) The standard of care is a legal term, most commonly found in state statutes or jury instructions and reads something along the lines of "Level of skill, knowledge, and care in diagnosis and treatment that other reasonably careful nurses would use in the same or similar circumstances" (California Jury Instructions). Which means the standard of care is highly contextual. Working conditions are rarely perfect, and forces outside of your control may affect how well you can do your job. 

These may include:

• Hospital locations and resources (i.e. critical access vs. a Level 1 trauma center)
• Staffing 
• Patient ratios 

Things that are typically considered the hospital's duty to provide are safe staffing, proper equipment, adequate training, etc. But during a given shift, deficits in these factors will affect your ability to provide the level of care expected of you. You wish you could reliably show up to work each shift, knowing these would be provided, but you would be naive to think that's been the case…like pretty much ever. But its not just things we wish for, the public expects we will have these as well. 

Myths of malpractice insurance

We may as well call this section — "How the hell do you know, Jan?" Or "When the random 20-year veteran nurse and/or Instagram influencer nurse with 1-year experience decides to chime in" but here's the quick list of 'hot takes' I've heard. [psssst….these are not 'hot takes'... I've heard them since I was a student 18 years ago]

Lawyers will target you/You look more guilty if you have a nursing malpractice policy.

This isn't public information, and there is no way for a plaintiff's attorney to know if you are a "deep pocket." As my friend and plaintiffs attorney Marlie Willer (@birthijurylaw on IG) says "we can't just go shopping for people to sue based on who has money", although this is a perennial myth. During discovery, this information might or might not become available. It depends if you have opted for your own lawyer or are remaining represented by the lawyer the hospital insurance company has retained. But at that point, the complaint is already filed and in most states, it is challenging, if not impossible, to add you. 

Only providers get sued. 

Mostly, yes. It'll almost always be the hospital, sometimes the physicians, but sometimes not. However, as we discussed above, nurses are working more autonomously in many areas with expanded scopes, roles, and specialties. This comes with the trade-off of taking more responsibility. This means your patients, if they are injured, have the right to seek damages and ask you to defend your actions and decision-making. I think this makes sense to all of us. Often when claims are filed, all healthcare providers involved will be named in the suit. During the discovery phase, more information is made available that helps determine whether you will be dropped from the claim.

You'll only be sued if you make a mistake.

You may not have done anything wrong and still find yourself named independently (as opposed to as an agent of the hospital) in a suit. A suit or BON complaint can be filed if a patient thinks you made a mistake, and they can find an attorney who is willing to take the case. If you understand the lawsuit process, you know this is unlikely without some preliminary substantiation. But if it does happen, unfortunately, you have to defend yourself, and that costs money. Malpractice insurance would help in this scenario by assigning you an attorney. The downside is that this lawyer may or may not have expertise in your type of nursing, as the plaintiff's attorney will most certainly be. NSO shares a story on their website where they covered a nurse's defense, spending $500,000 even though it was decided in the nurses favor.

Your employer's policy covers you vs. Your employer will 'throw you under the bus'

First and foremost, an employer's and provider's insurance policies are required by law. It is a function of being a business. In every state, either by statute or precedence, the nurse as an employee is covered for their actions while on the clock. You might see the words XYZ hospital and its agents in the filed complaint. Agents = employees, including nurses. 

An example would be a grocery store. The grocery store has insurance in case someone gets hurt at their store, among other reasons. If an employee mops and forgets to place the 'caution: slippery' sign and someone falls, who is sued? Probably the grocery store. Not poor Jake, the 17-year-old part-time employee. Even if Jake didn't follow the policy to put up the sign. The lawyer defending the hospital, and by extension its employees, can't not defend you. That's just not a strategic option for them, unless in rare cases, like if you did something illegal. Remember: this is an attorney who is defending the hospital's insurance company. The hospital may not have even picked this attorney. The hospital has insurance, it's not really their pocket (unless they're self-insured) the way we've all been led to believe…the insurance company is trying to make sure they really need to pay the claim.

With that being said: have you seen or requested a copy of their policy? You can do this through HR and I do very much recommend it. It may include gaps, exclusions or policy limits you need to be aware of, and there are a few (less than 5) parts of the country where the last two paragraphs go out the window. You might incur unexpected out-of-pocket expenses, like childcare to attend your deposition. But as mentioned before, in my 300 cases with over a thousand nurses involved, none had personal insurance and none were being individually sued outside of their relationship with their employer. Would a hospital throw a nurse under and pass the financial burden if a hospital could? Yeah, I think some would. I just have never seen it. Nurses might be fired or even blamed as part of a defense strategy, but what we're talking about is a financial liability. 

How much does nurse malpractice insurance cost?

It's so freaking cheap. Which also annoys me, tbh. A product you will almost certainly never need, but so inexpensive you just pay for it anyway. And there are a lot of nurses, so let's just say, the companies know how to make money. If there was as many lawsuits against nurses as they claim, the policies would be far higher, like they are for providers and hospitals. With that said, is not surprising how low-priced it is. In most states, you can find 1 million dollar policies for <$100 per year. It depends upon a few factors, including location and type of work. But this low price is why you are pressed to find anyone hardcore advocating against it. Below are three of the most well-known nurse liability insurance providers. It's best to receive quotes from multiple companies and compare benefits before making a decision.

Two types of policies

• Claims-made — This type covers you if both the incident AND the claim are reported during the time you are insured. An example is if you carried a claims-made policy in 2021 and a suit was filed against you in 2021, you're covered. But if a claim is filed in 2022, you wouldn't be covered. It typically is attractive for the low premiums.
• Occurrence-type — This type covers you for incidents occurring during the policy period. The claim can be reported anytime after.regardless of when the claim is reported. If an incident occurred in 2021 when you had your policy, but the claim wasn't filed until a later year and you don't have the policy any longer, you would still be covered. Important to consider with this is the statute of limitations in your state and any tolling provisions applicable to patients typical for your specialty i.e. minors often have longer to file a lawsuit than an adult (check the statutes of your state here)

What companies offer professional liability insurance?

Nurses Service Organization (NSO)

NSO is one of the largest providers of professional liability insurance for nurses. I don't know why, but they give me a bad vibe.

Healthcare Providers Service Organization (HPSO)

They are a sister company to NSO and offer additional consulting liability protection for nurses which helps protect you if you are offering education or consulting services for other nurses, hospitals, or serving as an expert witness. This is what I carry, specific to my work as an educator, speaker, and expert witness and does cover my work as a staff nurse also. But I never had it prior to needing the additional coverage for my business, except once as a public health nurse, but the County told me this was required upon hire.

Proliability 

Proliability is a pretty old company but doesn't have the name recognition of NSO.

I like them because they also offer discounts on your insurance for things that reduce your risk, similar to good driver discounts on auto insurance, like being certified and taking specific courses.

**If you have a policy or are getting a policy, read all of it, fine print, everything — know what you are paying for. Ask questions and make sure you understand the answers. If you are unsure what something will cover, ask! You don't want to think you are 

Is malpractice insurance for nurses worth it, even if my employer covers me? 

This is where my thoughts on this topic have changed in recent years for two main reasons: 

1) Your employer policy does not cover you outside of work and we don't just suddenly stop being nurses once we walk out those doors. Personal liability insurance protects you 24 hours a day, clocked in or clocked out. Individual liability policies also include additional perks that can come in handy, beyond what the hospital policy covers. Check with the particular company, but often personal nursing liability coverage policies include at least some additional situations, like covering volunteer work, HIPAA violations and libel or slander (Hi social media rants!) 

2) I’m not one to fearmonger, in fact, it is against my values and everything I teach nurses regarding lawsuits and professional practice issues. But the license protection benefits i.e. Board of Nursing/license defense is the most compelling reason in our current nursing environment. Primarily because we are experiencing staffing shortages and crunches that we haven't seen before. The normalization of heavy assignments with higher acuity will lead to preventable patient harm. We all know that patients will be preventably harmed due to unsafe ratios. What needs to be clarified is how this will be factored into decisions by the Board of Nursing in the individual states. Some have made statements on this but not all.