Greetings to my Elite NP sisters and brothers!
Today’s article is a guest post from a malpractice insurance agent/broker. I wanted to provide a quick summary of what it is you need to know as a nurse practitioner to ensure you have appropriate malpractice coverage. I want to ensure every single one of you are adequately covered as it is a critical aspect for long-term financial redundancy. We all need to make sure we are covered for what we are doing!
I reached out to a contact of mine within the malpractice insurance industry to help enlighten us on the innerworkings of malpractice coverage. Ed Kuhn is co-founder and a licensed agent for Wellness Medical Protection Group where he specializes in malpractice coverage for niche medical practices and med spas. Ed was kind enough to write an article for the Elite NP readership to educate each one of you on the key aspects you need to know about malpractice:
Independent solo healthcare practitioners of any specialty who are operating their own business have now also become responsible for administrative duties, one is being the research, applying, and procurement of quality insurance protection for your practice, in particular medical malpractice insurance.
Where to start?
The most important consideration when starting to shop for coverage for yourself and the business is to make sure you have a policy that is specifically designed and tailored for your practices specialty. If you are providing more niche services like The Elite Nurse Practitioner educates on, then you will be lumped into the “med spa” malpractice class more than likely.
The “med spa” underwriting class encompasses aesthetics, anti-aging, alternative, & complementary medicine in addition to cash-based elective procedures like Botox, HRT, laser hair removal, chelation therapy, and PRP. Reason being the policy wording has to fit a class. If you are performing Botox injections, your policy should not exclude “cosmetic” procedures for example. This is very important because most standard malpractice policies you probably have been covered under are not suitable for med spas and will not adequately protect you unless it specifically says so.
During the application process of a malpractice policy, you’ll be asked to disclose your activity to be covered in the form of forwarding a menu of services or completing a list of procedures that need to be covered that is outlined on most medical professional applications. A list of procedures and services such as HRT, IV Infusion, Botox, and PRP to name a few, who is doing it, and how many procedures/services on an annual basis your practice will perform will need to be disclosed during the application process.
Bottom line here is that if you disclose it on the application, and it is approved by underwriting in that you receive terms and nothing relative to your procedures is excluded, then its covered. The responses and representations you list on the application become part of the policy. This is very important in that if you are doing a procedure NOT listed on the application AND a subsequent claim results from that procedure, then the insurance carrier can easily deny coverage because they can claim you didn’t represent it. Therefore, when in doubt ask the agent. Ensure you also have this “on paper” through email communication for your records. Also ensure they are aware of new services you might be integrating into your practice.
The next step in obtaining a malpractice policy is product selection. There are two main types of policy forms and The Elite Nurse Practitioner covered them well in his article, but let’s review them both: Claims Made and Occurrence policies. The difference between the two is simply the timing of when to report a claim after the policy is cancelled. Also referred to as extended reporting (the ability to report a claim after you have cancelled the policy, considering the 2-3 year statute of limitations in most states).
Claims made means the claim must be reported, regardless of when it occurred, while the policy is still active. Upon cancelling the coverage, you have the option of purchasing more insurance (tail coverage) and the ability to report a claim for typically up to 3 years after cancelling (offered in 1, 2, or up to 3 years). The cost of this is typically 100 – 200% of your expiring annual premium, depending on the length of “tail.”
Occurrence policies mean you can report a claim as long as it occurred within the time you had the policy in force. You do not have to purchase a “tail” to get extended reporting with an occurrence policy.
Occurrence forms are rare in the med spa marketplace and most times not available. So, claims made is the predominant form. If there is only one occurrence form out there in the marketplace, your stuck with them until cancellation, even if they restrict terms, exclude procedures, raise annual premiums, etc. You will have no alternatives.
So, the difference between occurrence and claims made is mostly “pay me now or pay me later” since the occurrence forms typically cost more because the tail is built into them. Over time, the two would just equate, and with more time, you would end up paying more for the occurrence. Keep this in mind.
Key points with malpractice from a malpractice policy broker:
· The most important aspect of a malpractice policy is to make sure it covers all you do – the suitability issue.
· The coverage is flexible enough to make coverage adjustments as you grow.
· Use an agent who specializes in med spas and anti-aging insurance to help guide your decision-making process.
· Understand that the act of buying a policy is a series of logical decisions and the insurance rates are market driven and they can fluctuate with changing economic conditions.
Thanks for the article, Ed! I am sure many of The Elite NP readership will walk away from this knowing more about malpractice coverage.
The key take away for me in talking with Ed is that you need to make sure your policy is covering what it is you are doing! Many policies state that “if it is within your scope of practice, then you are covered” like CM&F states. I have talked with my lawyer about this wording, and she states that this language basically means that the malpractice insurance company would not cover you for doing things that are totally outside of your scope such as a CNM providing testosterone replacement therapy to men or an FNP performing a vasectomy… So, be aware of your scope! As long as you are performing services within your scope, then you would be covered. The good news is that it is within the scope of most nurse practitioners to provide niche services, therefore there should be no issues with these more broad type of policies.
Regardless, I don’t like taking any chances therefore I ensure that my policy is covering exactly what it is I am doing. I think it would be a wise exercise for many of you to just reach out to your insurance broker and ensure that what you are doing is covered. This is CRITICALLY important for your practice and your long-term financial health!
If you want to talk with Ed Kuhn or the Wellness Medical Protection Group, feel free to visit their website at https://medispacover.com, call them at 1-855-851-2968, or email Ed directly at email@example.com.
I hope this has helped 😊