Malpractice Insurance: A Must-Have For Physician Assistants

Physician assistants are advised to carry malpractice insurance, also known as professional liability insurance, to protect their professional reputation and financial future. This insurance covers liability arising from their profession, including allegations of malpractice, and offers financial protection in the event of a malpractice lawsuit. While some employers may provide malpractice insurance for their employees, it is recommended that physician assistants also have their own personal liability policy that can be carried from job to job. Malpractice insurance typically covers legal fees and expenses, as well as any settlements or damages that may arise from a malpractice lawsuit.

Individual vs. Group Policies

All clinically practicing physician assistants (PAs) should carry professional liability coverage, often called malpractice insurance, during all time periods in which they practice. This insurance covers your exposure to liability arising from your profession, including allegations of malpractice. Liability insurance offers essential financial protection because a malpractice suit can be brought against you at any time after you have seen a patient.

There are two ways to acquire a professional liability insurance policy: through an individual policy or a group policy.

Individual Policy

An individual policy is one that you purchase for yourself. For a PA’s needs, an individual policy is preferred because:

• You control the proof of insurance. Therefore, you will not need to rely on an employer to verify coverage when you need to, possibly many years after you have moved on to other employment.
• Since you own the policy, you are the only named insured party. This prevents possible conflicts of interest that can happen when you are on a group policy.
• A policy of your own provides you with separate limits of liability; your limits will not be reduced because you share coverage with other employees.
• An individual policy should cover you for any additional job, whether working part-time or volunteering.

Group Policy

Some employers may refuse to reimburse you for an individual policy and insist that you be covered under a group policy. This is because some advantages for individuals become disadvantages for employers. For example, if there were a lawsuit, you would have your own attorney representing your interests. However, employers would prefer a single attorney managing a “global” settlement of any claim, regardless of your personal interest.

Additionally, employers may refuse individual coverage because their insurers will not permit employees to have individual policies. Insurers also want settlement processes as streamlined as possible and do not want to negotiate with your personal attorney.

If you must be covered under a group policy, be sure to:

• Obtain a copy of the entire policy. If that is not possible, obtain a copy of the “certificate of insurance,” which summarizes the terms of coverage.
• Verify that you are listed by name on the policy.
• Verify whether you have occurrence or claims-made coverage.
• Obtain copies of the policy or the certificate of insurance every year. If it is a claims-made policy, you should continue to get copies even after you have left the employer.

Occurrence vs. Claims-Made Policies

All clinically practicing physician assistants (PAs) should carry professional liability coverage, often called malpractice insurance, during all time periods in which they practice. This insurance covers your exposure to liability arising from your profession, including allegations of malpractice. There are two types of professional liability coverage available to PAs: occurrence and claims-made.

Occurrence policies cover incidents that happen during the policy period without regard to when the claims are reported. Occurrence coverage provides protection for each policy period indefinitely. For example, if you had an occurrence policy in 2003 (which you terminated in 2005), and then are sued in 2017 for an incident in 2003, you will be protected. This policy provides coverage for incidents that happened during the policy period, no matter when the claim is filed. You will not need an extended reporting endorsement (“tail” coverage) if you take an extended leave from your career. Occurrence policies are relatively rare since insurers have difficulty estimating the cost of claims long after a policy expires.

Claims-made insurance covers incidents that happen only while the policy is in force; once the policy has been terminated, coverage no longer exists. If you want coverage after the policy has been terminated, then tail coverage must be purchased. For example, if you had a claims-made policy in 2006 (which you terminated in 2008), and then are sued in 2017 for an incident in 2006, you would not be protected. This policy provides coverage for incidents and claims that are filed during the policy period only. You must keep up with your policy/policies to ensure that you do not have gaps in coverage. This policy is generally inexpensive at first, then gradually increases (“steps up”) over time—about five years—to a “mature” premium. If an incident happened during the policy period, but the claim was filed after the policy expired, then the insurance will not cover that claim.

In summary, occurrence policies offer more permanent coverage. A physician with a claims-made malpractice insurance policy does not have to worry about past incidents once a new year begins, but an occurrence policy gives a physician peace of mind that their malpractice insurance will always be there for them.

Malpractice Insurance Cost

The cost of malpractice insurance varies depending on several factors. These include industry, specialty, state, coverage type, and insurer claim limits.

For example, the cost of malpractice insurance for lawyers specialising in securities, intellectual property, estate planning, and personal injury may be higher due to the riskier nature of their specialty. The same is true for physicians in riskier specialties, such as obstetricians, surgeons, and ER doctors, who tend to pay higher premiums.

The type of coverage also affects the cost. There are two main types of malpractice insurance: claims-made and occurrence-based. Claims-made policies are generally cheaper initially but increase over time, whereas occurrence policies are more expensive upfront but costs even out over time.

Additionally, the state in which one practices also impacts the cost of malpractice insurance. For instance, doctors in New York pay the highest premiums in the country, whereas doctors in North Dakota pay the least.

The cost of malpractice insurance can range from $4,000 to $12,000 per year for the average medical professional, while surgeons may pay up to $50,000, and obstetricians/gynaecologists may pay over $200,000 per year.

It is worth noting that malpractice insurance is highly recommended, as it provides essential financial protection against lawsuits that can be brought against healthcare practitioners at any time.

What's Covered Under a Policy?

Malpractice insurance for physician assistants (PA) provides protection from patients or coworkers who claim their negligence at work caused an injury. This could include a wrong diagnosis, a sexual assault claim, an infraction of HIPAA privacy laws, or any other claims of negligence.

CM&F, one of the country's longest-standing professional liability insurance providers, offers comprehensive, portable, and flexible coverage for PAs. Their policies include:

• Coverage options of up to $2 million per claim
• Full consent to settle claims
• Telemedicine/telehealth coverage
• License defense coverage
• General liability coverage
• Defense costs in addition to liability limits
• Sexual misconduct defense
• HIPAA defense coverage

CM&F's malpractice insurance for PAs is portable, meaning that as a PA moves, so does the coverage. Their insurance is attached to the individual PA, not their place of work. This is especially important for PAs who moonlight, work at multiple places, or have private clients.

CM&F also offers two types of malpractice insurance policy options: occurrence and claims-made. An occurrence policy means that if a claim is made against a PA regarding a past incident that occurred during a time they were previously covered under CM&F liability insurance, that claim will be covered by CM&F even if the PA has since ended their liability coverage. Claims-made insurance policies only protect professionals if they have insurance at the time of the claim.

Why Have Your Own Insurance?

While many employers offer malpractice insurance, it is recommended that physician assistants (PAs) have their own insurance policy. This is because a personal liability policy protects your license, your personal assets, and your financial future.

If you rely solely on your employer's insurance policy, your interests will likely be viewed as secondary to those of your employer. Additionally, your employer's shared liability insurance policy may have inadequate coverage limits if a claim is made against multiple employees or the entire clinic. This means that other policyholders could use a significant portion of the coverage, leaving little for other professionals and increasing the risk of personal losses.

Having your own malpractice insurance policy means having a team that is focused on your personal interests, not your employer's or anyone else's. It also means that you will have separate limits of liability, which will not be reduced because you share coverage with other employees.

Individual malpractice insurance is also beneficial because it is portable from job to job and can cover you for any additional jobs, such as working part-time or volunteering. With individual coverage, you also control the proof of insurance and do not need to rely on an employer to verify coverage, which may be difficult if you have moved on to other employment.

Furthermore, malpractice suits can jeopardize your professional reputation and credentials, potentially causing your license to be revoked or suspended. They can also become a matter of public record, which employers can use to disqualify you from future job opportunities. Therefore, it is vital that malpractice suits are vigorously defended, and insurers will provide legal representation to ensure your best interests.

In summary, having your own malpractice insurance policy as a physician assistant is important because it provides you with comprehensive protection, puts your interests first, and allows you to have a dedicated team focused on defending your personal interests and assets.

Frequently asked questions