What should go into a contract termination letter from a nurse practitioner? First, when somebody wants to leave a job, for whatever reason, there’s going to be something in the contract that states how they can terminate the contract. Briefly, usually, it’s one of four ways. Either the initial term just ends, so if you have a two or three-year contract, it doesn’t automatically renew, and it ends. You can move on. A letter is not needed in that circumstance.
You can do it by mutual agreement, and in that circumstance, you wouldn’t need to provide a termination letter. If one of the parties terminates the contract for-cause, let’s say one party is in breach of contract, and the other states, you need to fix the breach, or I’m going to terminate the contract immediately. That would have to be a written letter. However, that’s more of just a notice they’re in breach. That’s not necessarily a termination letter.
Nurse Practitioner Resignation Letter
A nurse practitioner resignation letter serves as a formal, written notification of a nurse practitioner’s intention to leave their current position at a healthcare facility. The letter should include the nurse practitioner’s name, current position, the name of the supervisor or manager, the healthcare facility’s name, and the effective date of resignation. It is also essential to express gratitude for the professional experience and opportunities provided during their tenure, as well as offering assistance during the transition period. This courteous approach maintains a positive relationship with the employer and contributes to a smooth handover of duties and responsibilities.
How Much Notice Should a Nurse Practitioner Give?
When considering resignation, a nurse practitioner should typically provide a minimum of two weeks’ notice to their employer. However, it is essential to review the terms of the employment contract, as some healthcare facilities may require a more extended notice period, such as 30 or even 60 days. Providing sufficient notice allows the employer ample time to find a suitable replacement and ensures a smooth transition of responsibilities. Maintaining a professional approach in this process preserves a positive relationship with the employer and can be beneficial for future references or networking opportunities.
Can a Nurse Quit Without Notice?
While it is generally unprofessional for a nurse to quit without providing notice, there are certain circumstances where immediate resignation may be justifiable. If a workplace or employer engages in unsafe or illegal practices, compromising the well-being of patients, staff, or the nurse, it may be appropriate to leave without prior notice. In such situations, the nurse should prioritize their safety and consider reporting the hazardous conditions to relevant authorities or licensing boards. However, under typical circumstances, providing at least two weeks’ notice is the standard expectation to maintain a positive professional relationship with the employer and minimize disruptions in patient care.
Just Write Your Notice and Leave
The most common scenario when a nurse practitioner would need a termination letter will be if they’re utilizing the without-cause termination provision in their contract. Without-cause termination simply means either party can terminate the agreement at any time with a certain amount of notice to the other. Normally in healthcare, it’s between 30 to 90 days. In a circumstance where an NP said, I don’t want to work with this employer anymore. Then you look in the without-cause termination section in your contract and determine how much time is left. If it’s 90-day notice, then 90 days prior to your leaving, write them a letter.
And then in the letter, it just needs to simply say, per the agreement, I am terminating the contract with 90 days’ notice, and my last day of work will be X date. Thank you for the opportunity. That’s it. I find many healthcare providers find that they want the termination letter to be an airing of grievances. Just listing all the wrong things, here’s all the reasons why I’m leaving, here’s all the things that you screwed up on, all the things I’m unhappy with.
There is no benefit if you are leaving an employer. To go into any of that, it doesn’t matter, and it doesn’t help you. Maybe it can shed some light on some of the problems that the employer has, but that’s not a problem. That’s not your job. If you don’t want to work there anymore, just give notice and leave. And for a couple of reasons, one, even if you’re very unhappy, it still doesn’t make sense to burn bridges when you don’t have to.
Without Cause Employment Contract
And then what about a scenario where maybe at the time that you left the job was undesirable, but something happens, a manager quits, and a new one is hired that has a better relationship with or the compensation changes or the venue changes. I mean, many things can happen in a business where things can change quickly. And if you just send some flame thrower of a termination letter, and completely burn the bridge of the employer, even if some of the things that were wrong when you decide to leave have been changed, you may not have the opportunity to go back there simply because you burn the bridge on the way out. So, although I know it feels good emotionally to say, you stink, and therefore I’m leaving, there’s honestly no benefit to the nurse practitioner in doing that.
So, keep it short and sweet. Per the agreement, whatever without-cause section termination that is, you give the exact number of days; this is the date that will be your last day. Appreciate the opportunity, and that’s it. That’s all you must do. You don’t have to make some big justification, just without-cause; that’s all you need legally. You don’t have to provide any reason why. It’s just that I’m terminating the contract, and that’s it. So, those are my thoughts on that. I kind of hear it time to time again about people wanting to put together a two-page letter of termination. And honestly, it just doesn’t make a lot of sense, in my opinion.
What Needs to Go in a Nurse Practitioner Termination Letter?
What needs to be in a termination notice for a nurse practitioner? First, you always want to go to your NP employment contract and look underneath your termination clauses. It honestly depends on why you are terminating your employment. If you are terminating it just because you feel like it’s not a good fit, you don’t like the leadership, the working group, you hate the area, or something like that, you’d want to search for the without-cause termination. In there, you’ll find how many days prior notice you need to give up on your termination. It’s normally anywhere between 60 to 90 days. In that case, if you’re terminating your agreement for a without-cause or no cause reason, you would just simply write in your termination letter that you are terminating your employment.
You are giving your notice starting on this day, and then, per our agreement, my last day will be, and then insert whatever your last date will be. You also want to be careful about how you deliver your termination letter. Again, that’s outlined in your work employment contract, you’re going to look under the provision that says “notices.” Sometimes you’re able to hand-deliver your termination; other times, it must be emailed or certified mail to a certain address or multiple addresses.
You want to be very careful and make sure that you give proper notice as a professional. So, you turn that termination letter in properly because the clock doesn’t start until you give proper notice. If you have a 90-day notice period, and you haven’t given proper notice, and you think you’re on day 30, but they never received your termination letter, that’s difficult. The 90 days or 60 days or anywhere in there does not start until you give proper notice.
You Could Leave Your Job Without Cause
So, make sure you read your employment agreement. If, for example, it’s a without-cause termination and you have that clause in your contract, writing your termination letter can be very simple. In writing your nurse practitioner resignation letter, you can thank them for the opportunity and let them know that you’re happy to help with the transition, but this is not required by your employment contract. You could just simply state, this is my notice, this is the day that I’m giving my notice, this is my last day. That’s really all you have to have. You don’t have to give a reason if it’s a without-cause termination.
Now, let’s talk about instances where contracts don’t have without-cause termination. So then, it gets a little bit difficult. If you want to terminate your agreement, there are a couple of different ways you can do it. First, you should know if they have breached the agreement. That will allow for your contract’s termination if they’ve been breached. But you need to give them notice of the breach and what the breach is.
What the breach typically looks like is that they’re not paying you. That would probably be the biggest material breach that you could hold them accountable for and therefore terminate your agreement. Most of the time, though, you will have to give them notice that they are in breach of the contract, and you should also give them the amount of time to cure their breach. If they don’t, then you can terminate the agreement. And then the last way, if they have not breached the agreement, you just went out, but you don’t have a without-cause termination. This is a difficult position to be in. Then you’re kind of at their mercy.
Examples of What You Can Put in Your Notice Letter
In your termination letter, if you do not have a without-cause termination, just saying that one more time, you must ask to be let out of your agreement. So, this time I would put in language asking to be released from your agreement. You can state the reason if you think that it would help your case. It kind of just depends on the situation. Also, I feel like if you need to be let out of your agreement, it might be helpful if you’re going to be moving out of the area.
So, you’re letting them know that you do not want to compete with them. You just have to move back, maybe for family reasons or personal reasons, and you don’t have to get into those. You can just say, for family reasons, I’m moving out of the area, and I need to be released from my employment contract. An NP also must consider the ramifications of their compensation, such as insurance and salary if they leave.
But you are kind of at their mercy, so the tone of that termination letter, you want to ask and be gracious and let them know that you’re willing to work with them to make the transition as easy as possible. This is kind of a difficult situation. So in this example, I do recommend if your contract does not have a without-cause provision, sometimes it is better to consult with an attorney to kind of discuss the repercussions.
Liquidated Damages
Sometimes in employment agreements, some clauses are called liquidated damages, which just means that if you don’t give proper notice or you terminate the agreement for any reason, without their approval within this specific period or the term of the agreement, they can ask for money from you. And that can be tens of thousands of dollars. So, this is a serious thing that you want to take very seriously. Read your contract first. Look for that without-cause termination. If you have that clause, you’re good to go. Just give your notice. Your resignation letter should let them know that you’re giving your notice on this day; you’re leaving on that day.
If there’s no without-cause termination, you want to check and see are they in breach? If they are, give them notice. You may need to give them time to cure this, and if they don’t, then you can terminate the agreement. And if they’re not in breach of the contract, then you’re kind of at their mercy; you have to be asked to be released. And you want to do this very carefully. If you’re in this situation, I always recommend consulting with an attorney who is familiar with contract employment issues within healthcare practice, specifically those who want to succeed in their nurse practitioner career.
https://www.chellelaw.com/wp-content/uploads/2022/07/Blog-47-scaled.jpg14402560adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-05-02 19:59:292023-08-22 21:16:31What Should be in a Nurse Practitioner Contract Termination Letter?
How much does tail policy cost for a nurse practitioner? First, we need to talk about what types of malpractice insurance, also known as liability insurance, are available. And then when you have a certain type, do you need tail coverage? First, the setting is important. If an NP is employed by a hospital or hospital network, at least nowadays, they’re self-insured. This means tail policy is generally unnecessary. If they do have a claims-made policy, then tail policy is necessary. However, if a hospital or hospital network employs you, a nurse practitioner would rarely have to pay for their tail. When they would have to pay for their tail is in a kind of private practice setting.
2 Types of Malpractice Insurance
If they’re employed by a smaller physician-owned group, or in some states if they have their practice. In that case, two types of malpractice insurance are the most common. One is called occurrence-based and one is claims-made. Now, with an occurrence-based policy, the malpractice incident must only occur while a policy is in effect. It means tail policy is unnecessary. As far as claims-made insurance goes, a policy must be in effect when someone makes a claim. And so, tail policy is necessary for a claims-made policy. To break down claims-made, let’s say, a nurse practitioner is employed with a private physician-owned practice. Suppose they terminate their employment.There’s still a gap from when a patient knows the last day the nurse practitioner provided care for the practice.
Usually, there’s a two-year statute of limitations in most states. And in that case, the patient can sue after the nurse practitioner no longer works for that practice. Therefore, a policy must be in effect that covers that gap between when they leave. And then on the last day somebody can sue them. In most states, it’s two years from when the patient either knew or should have known of the malpractice incident. There are also some minor exceptions for minors when they become adults, that type of thing. But for the most part, two years is a good rule of thumb. In the employment contract, if the nurse practitioner has a claims-made policy, it will state who pays for tail policy. If it’s a private practice, I’d say it’s often. The NP would be responsible for it.
Nurse Practitioner Malpractice Insurance Cost
The cost of nurse practitioner malpractice insurance varies based on several factors, including the individual’s specialty, geographic location, years of experience, and the specific insurance provider. Generally, the annual premium for medical malpractice insurance for nurse practitioners ranges from $800 to $2,200, with higher-risk specialties potentially incurring higher costs. To obtain the most accurate quote and appropriate coverage, nurse practitioners should research and compare insurance providers, taking into account their unique professional needs and circumstances. Additionally, some employers may offer malpractice insurance as a benefit, so it’s essential to explore available options when considering employment opportunities.
As I mentioned, if they’re in a hospital or hospital network, the hospital will cover it more often than not. If the nurse practitioner is responsible for paying for the tail, it must be purchased generally before or right around the employer’s termination date. And a good rule of thumb is it’s about twice your annual premium. Your annual premium is how much the employer must pay to insure you yearly. If you had to pay for tail coverage, it normally is around twice your annual premium. It’s a one-time payment. You don’t have to pay it every year. It’s all paid upfront. And your tail is covered for as long as whatever the length of the tail policy you bought was. Tail policy can have longer tails than others.
I mean, you could theoretically get a one-year tail, two-year tail, or an infinite tail. For most people, five years is an excellent safe amount. If you had a two-year tail, but something happened in year four or five, you are no longer insured. That would be an issue. Now, how much does malpractice insurance cost for most NPs? Usually, it’s somewhere between 1500 to 2,500. So, let’s say it’s $2,000. Then your tail cost would be around 4,000. Not like an enormous amount of money. But certainly something you may want to negotiate before signing the employment agreement.
Malpractice Insurance for Nurse Practitioners Cost
Understanding the cost of malpractice insurance for nurse practitioners is a critical aspect of managing your professional expenses and protecting your career. While the cost of malpractice insurance for nurse practitioners varies by state, specialty, and individual circumstances, it is essential to find the right coverage to safeguard your practice. The average annual premium for malpractice insurance for nurse practitioners can range from $800 to $2,200, but the investment in a comprehensive policy is invaluable when it comes to mitigating the risks associated with your profession. By researching and comparing different insurance providers, you can secure the best coverage for your specific needs and ensure peace of mind as you continue to provide quality healthcare services.
Ways You Can Get Out of Paying It
A couple of things to think about. If it states that you must pay for the tail, you can always ask the employer to pay for it. That’s one way of doing it. If they’re unwilling to pay the entire amount, sometimes we’re successful in tiering it. Let’s say, you have a three-year term for your contract. You could say the employer will take over one-third of the tail costs each year. So, by the time the three years are over, the employer pays the entire cost of tail coverage.
Another way of getting out of paying for it would be if your new employer pays for your old tail. That’s called nose insurance. Or, if you stay with the same insurance company, normally, they’ll roll over your policy wherever your new employer is. And you wouldn’t have to pay for tail coverage. This is something you can negotiate in the contract. Some employers are unwilling to change any terms in the agreement or maybe unwilling to change this term.
And then, if that’s the scenario, you must decide whether it’s a deal-breaker for you or not. So, that’s how much tail coverage costs. Usually around twice what your annual premium is. You certainly want to determine your annual premium before signing the agreement. And that way, you can forecast what your tail coverage cost will be.
How Much is Malpractice Insurance for Nurse Practitioners?
The cost of malpractice insurance for nurse practitioners depends on various factors such as specialty, location, experience, and the chosen insurance provider. Typically, the annual premium for this essential coverage can range between $800 and $2,200. However, those practicing in higher-risk specialties might face higher insurance costs. To determine the most accurate rate and suitable coverage, it is crucial for nurse practitioners to thoroughly compare insurance providers and consider their specific professional requirements. It’s also worth noting that some employers offer malpractice insurance as part of their benefits package, so exploring these options during job searches can prove beneficial.
How does tail insurance work? You’ll need medical malpractice insurance while practicing if you are a high-level healthcare professional like physicians, NPs, PAs, and dentists. And then, depending upon what type of coverage you have, you may need tail insurance. I will break down the common types of malpractice insurance and when tail insurance is necessary. And the details of when it needs to be paid, for how long, how much it costs, etc. The two most common malpractice insurance types in private practice are occurrence-based and claims-made policies.
When Do You Need Tail Insurance?
An occurrence-based policy simply means a policy must be in effect when the malpractice incident occurs. And in that scenario, tail insurance is not necessary. Under claims-made insurance policies, a policy must be in effect when the claim is made. If a provider leaves, there’s a gap between their last day at work and the day somebody can sue them. It’s called the statute of limitations. For most states, it’s two years.
There are some exceptions, but in general, two years is a good rule of thumb in this situation. Let’s say for this case, it’s two years. Suppose you leave the employer. There’ll be a two-year gap where someone can still sue you for what you did for that employer. And so, in that scenario, you need a policy that covers that gap, known as tail insurance in the industry. If you have a claims-made policy, you need tail insurance. If you have an occurrence-based policy, you don’t.
Who Should Purchase Tail Coverage?
If you have a claims-made policy, the employment contract will dictate who pays the underlying premium. Ninety-nine out of a hundred times, it will be the employer if you’re an employee and not an independent contractor. And then the employment agreement will also cover who pays for tail insurance. Now, this can vary significantly from contract to contract. If you’re working for a private physician-owned practice, it’s more likely they will be responsible for paying for tail insurance.
A physician-owned practice would rarely pay for tail insurance. I’d say maybe 75% versus 25%. So, 75% must pay for their tail insurance. In the contract, it’s going to state, alright, the physician is responsible for paying tail insurance. Let’s kind of break down the details of that. The tail policy will need to be in place before the end of the employment relationship. So, let’s say the physician gave notice, and there’s a 60-day without-cause termination. They will have to get that policy secured before the end of those 60 days when they leave.
Average Tail Coverage Cost
Tail insurance generally costs about twice what your annual premium is. This varies based upon specialty. So, if maybe your primary care, it could be around 5,000 to 6,000. Whereas if you’re an OB-GYN, it could be 40,000 or 50,000 yearly. A good rule of thumb is twice the annual premium, which you will have to pay for tail insurance. It’s a one-time cost. You’re not going to have to pay it every year. But you’ll have to pay all the money upfront to purchase the tail before the end of the employment relationship.
How Long is the Duration of a Tail Insurance?
Now, how long does tail insurance last? Well, it depends on what type of policy you bought. You can purchase one-year tail insurance, two-year tail insurance, five-year tail insurance, and unlimited tail insurance.In my opinion, it seems shortsighted to purchase short tail insurance. Why would people do that? Well, it’s just a cost. Now, I said two times is the average. But it can usually range from 1.5 times up to 3 times the annual premium. That is, based on how long the tail insurance is. And then also, how long you’ve been with the employer and that type of thing.
Determining how long you should get should be easy. It should be unlimited tail insurance; it should go on forever. You don’t want a scenario where you are not covered when a claim is made. And that could be financially crippling for a healthcare provider if they’re ultimately found guilty or must reach a settlement.
Add Tail Coverage to Negotiations With Your New Employer
Now, you can negotiate who pays for tail insurance coverage in the employment agreement. If you go to the employer and say, I’d like you to purchase my tail insurance, they may say no. One strategy we’ve been successful with is asking the employer to forgive a portion of the tail insurance cost. Based upon how long the provider has been with the employer. For instance, let’s say the physician has a three-year initial term. They complete the three years. Negotiating with the employer is one way of getting out of having to pay for tail insurance.
Another would be if your new employer pays for your old tail insurance, that’s called nose insurance. Or this doesn’t work if you’re working in the hospital network. If you’re with a private-owned practice and leave for another one within that state, they use the same insurance carrier. Generally, the insurance carrier will roll over your old policy into your new one. You won’t have to purchase tail insurance.
Now, there’s no way you’re going to know, okay, in my next job when I leave this one, whether they have the same insurance or not, but that’s another way of getting out of having to pay for tail coverage. So, that’s how tail insurance works. It just covers the gap between when you leave an employer then the last day somebody can sue you. It’s around twice the annual premium. And then you can negotiate who is ultimately responsible for covering the expenses associated with it.
How is Tail Insurance Calculated?
How is tail insurance calculated? What is tail insurance? Under what kind of malpractice policy do you need it? And then how much does it cost? There are two common types of malpractice policies for healthcare providers. You have occurrence-based and claims-made. In a claims-made policy, you need tail insurance, and if it’s an occurrence policy, you do not.
Two Common Types of Malpractice Insurance Coverage
Let’s talk about the differences between the two malpractice insurance. For an occurrence-based policy, a policy must be in effect when the malpractice incident occurs. There is no need for tail insurance in that scenario, and I’ll explain why.
In a claims-made policy, a policy must be in effect when the claim is made. And so, for an employee who terminates a relationship with an employer, there will be a period where somebody can sue them. In most states, it’s two years. It’s called the statute of limitations. And in this scenario, let’s say a physician leaves the practice, they’re no longer an employee, and they have a claims-made policy, and that policy is done.
Well, they need an additional policy called tail insurance that covers the gap between when they leave the employer and then the last day they can be sued by an individual. There are some exceptions in some states when a minor becomes an adult and a few other scenarios, but let’s just use two years as a common amount here. The employment contract will state that the employer will pay for the underlying policy, assuming you’re not an independent contractor.
Who Will Buy Tail Coverage?
And then, it will also state who is responsible for tail insurance. Now, if you’re in private practice, like a smaller physician-owned group, they will likely have a claims-made policy. And it’s also very likely they will make the provider pay for tail insurance when the contract ends. If it’s an occurrence-based policy, you’re good; you don’t have to worry about tail insurance when the contract ends.
Why Would Someone Get One Over the Other?
An occurrence-based policy is around one-third more expensive per year than claims-made. So, if it is a smaller physician-owned practice, they usually use claims-made, so they pay a third less annually for the premium because they’re going to be the ones paying for it. And then two, they’ll usually put the tail insurance cost on the provider. So, they not only pay less per year for the premium, but they also don’t have to pay for tail insurance, and it’s just cheaper for them. That’s why 9 out of 10 private practice owners use claims-made coverage. Some use occurrence-based, but it’s rare.
If you have a claims-made policy, and it is determined in the employment agreement that you are responsible for paying for tail insurance, let’s break that down. It will state that you must purchase a tail insurance policy prior to your last day of employment with the employer. Usually, it’ll also state how long the tail insurance policy must be.
How is Tail Insurance Calculated?
Different factors are considered to calculate Tail Malpractice Insurance. There are different lengths of tail insurance. You could have one year, two-year, five-year, or infinite, and then with each one of those, it’s a little bit more expensive. A good rule of thumb in calculating tail insurance costs is about twice your annual premium. Let’s just say you’re a family practice physician. On average, your annual premium, so how much it costs to insure you each year, will probably be about $6,000. And so, if you had to pay double that, the tail insurance calculation would be $12,000.
Now, that’s a one-time payment. You do not have to pay it annually. You give it all at once, and then you’re covered for how long the tail insurance is. If it’s up to you how long the tail lasts, it makes sense to get an indefinite tail insurance policy. You are rolling the dice if you have a one-year tail insurance, but the statute of limitations is longer than a year because you’re uncovered for that period. And if you do not have malpractice insurance, they could come after you, potentially. And that could be catastrophic for a professional. If it’s only a couple thousand dollars more, it’s just simply worth it to get the longest tail insurance policy that you can. That way, it’s just one last thing you have to worry about.
How Do You Get the Employer to Pay for Tail Insurance?
Well, one, just simply asks them when you’re negotiating. I’d like you to cover the tail expenses. They may say no. If they do, you could come back at them, and we’ve had some success saying, alright, well, you’re not going to pay for all of it. What if we do it like forgiveness over the initial term?
What I mean by that is, let’s say you signed a three-year contract, you would say, alright, for every year that I complete for you, one-third of the cost of tail malpractice coverage will be covered by you. So, after three years, when I’ve completed the initial term, if I leave any period of time after that, you’re going to be responsible for paying for tail insurance. You could also have your new employer pay for your tail insurance. That’s called nose coverage. And then the last way of not having to pay for it would be if you stay with the same insurance company with your new position. They’ll generally just roll over your old policy into a new one. In that way, you don’t have to pay for tail coverage. So, that’s a little primer on how tail insurance is calculated.
Claims Made Insurance for a Nurse Practitioner Explained
What is claims-made insurance for a nurse practitioner? If you’re an NP and you are either employed with a private practice or maybe you have your own practice. If you’re in a state where that’s allowed, you will need malpractice insurance. And there are two common types of malpractice insurance for NPs. One is called claims-made coverage, and the other is called occurrence-based coverage. Now, you will be covered if you work for a hospital or hospital network. They’ll have a claims-made policy that they’ll pay for, along with the tail liability coverage. Or maybe they are self-insured. So, this is more directed to people in private practice or with a physician-owned group.
Alright, claims-made means a policy has to be in effect when someone makes a claim. Suppose you terminate your relationship with an employer. There will still be a gap between the last patient you see and the last day they can sue you. And so, your policy ends when the contract with the employer terminates. And in most states, there’s a two-year statute of limitations. That just means how long somebody has to sue someone for something. For most states, two years is the average amount for a medical malpractice claim. And since the original policy ends when you leave the employer, you need a gap policy. And that’s called tail coverage. A good rule of thumb is that tail liability coverage is around twice your annual premium.
See Who’ll Pay for Your Practitioner Malpractice Insurance
Now, the employment contract will dictate who pays for tail coverage if you have a claims-made policy. So, you need to investigate the contract. First, you need to see, will they pay for your underlying annual premium? Your annual premium is just how much it costs to insure you annually. They absolutely should pay for that. If you have an employer, they need to pay for that. Now, as far as tail coverage goes, it’s hit or miss who pays for it. But you need to look into the language of the contract. Then see, alright, if we have a claims-made policy, and the contract terminates, who’s responsible for paying for tail coverage? Tail is a one-time payment. You don’t need to pay for it yearly. And then it can cover different amounts of time.
It’s up to the person purchasing the tail. It could be a year, three years, or indefinite. It would make the most sense to get an indefinite policy. The price between a two-year plan and an indefinite plan is not that much of a difference. And there are some exceptions to two years for someone to sue you for malpractice. For instance, one minor has become an adult and a few other exceptions. But it just makes sense if you’re covered indefinitely, you don’t have to worry about it. The other type of insurance is occurrence-based coverage. This means a policy has to be in effect when the malpractice occurs. And in that scenario, you do not need tail coverage. So, claims-made is the only policy where you would need tail coverage.
Average Quote for Nurse Practitioners
Now, what’s the average cost for an NP for malpractice insurance? Well, I’d say 2000 per year is a normal annual premium. It will change somewhat based upon the specialty, but let’s say you’re an FNP. Probably 2000 is like a good average amount. It also will be state-dependent. Some states have stricter caps on medical malpractice claims. Therefore, their coverage will be cheaper, like Texas, for instance. If you had the choice between a claims-made and an occurrence-based policy, it would depend upon who’s paying for it. If the employer will be paying for it and don’t care what kind of policy you get. Getting an occurrence-based policy is a no-brainer. If you’re going to pay for it, you need to figure out and do a math equation. Alright, how long do I plan to be with the employer?
Which Professional Liability Insurance is Better?
Occurrence-based coverage is about a third more expensive than a claims-made policy. Let’s say you’ll be with an employer for one year. You’re like, alright, I’m only staying a year then we’re moving. Getting an occurrence policy is absolutely the way to go. Because you’re only paying a third more for the underlying policy with no tail coverage. Whereas with the tail policy, although it’s a third less, the tail cost will be twice that annual premium. And so, you don’t save significantly if it’s short-term employment and you have an occurrence-based policy. That’s the difference between claims-made and occurrence-based. If you’re an NP in your own practice, what kind of policy you will get is up to you. Most people just set out to have their own practice, and plan to do it long-term. If that’s the case, a claims-made policy might make more sense.
Last consideration, there are a few ways of getting out of paying for tail coverage. One is you negotiate with the employer in advance so that they pay for it, that’s obvious. Two, your new employer can pay your old tail, and that’s called nose coverage. And that’s one way of getting out of it. And then three, if you stay with the same insurance company you currently have, they will, or at least generally, roll over your old policy into your new one. You wouldn’t have to purchase tail coverage. Now, there’s no way you’ll know when you start one job that it will have the same insurance provider. But that is one way of getting out of having to pay for it.
Should a Nurse Practitioner Choose Claims Made or Occurrence?
Should a registered nurse practitioner choose claims-made or occurrence-based malpractice insurance? Suppose you’re working for a hospital or hospital network. In that case, they’re always going to pay for your underlying premium. So how much they pay for you annually. But it’s also very likely that they will pay for any insurance needed after the employment has terminated. Most of the big networks are now self-insured. Some may offer a claims-made policy, but they’ll almost always pay for the tail. The only time that you’d have to choose between an occurrence-based policy or a claims-made one. Is if you’re out on your own in a state that allows it. Or perhaps you’re in a private practice working with a physician.
How Occurrence-Based Differs from Claims-Made
What are the differences between the two insurance plans? Let’s take occurrence-based coverage first. An occurrence-based insurance policy means that a policy has to be in effect when the malpractice occurs. So, it doesn’t matter when a claim is filed, you’re covered no matter what if you have an occurrence-based policy. No tail coverage is necessary. For a claims-made insurance policy, a policy has to be in effect when the claim is actually made. It’s possible someone could file a claim against you after you terminate the employment. So, you need a gap policy, also known as tail coverage. That covers the gap between when you leave an employer and the last day somebody can sue you. It’s called the statute of limitations. In most states, it’s two years. There are a few exceptions, but let’s just take two years as a guiding principle here.
And so, you would have to get an additional policy that covers that gap. And that’s, as I said before, called tail coverage. Now, let’s talk about cost. Tail is generally around twice what your annual premium is.
Whatever you pay yearly, multiply those times two, and that’s a good estimate of your tail costs. It’s a one-time payment, you don’t have to pay for it every year. But you can choose different policies with different lengths that cover a different amount of time. You could get a tail lasting for two years, three years, or indefinitely, and then the price would change slightly. Obviously the longer, the more expensive it’s going to be. It doesn’t make sense to get a policy not covering the full statute of limitations in whatever state you’re in. You could potentially be personally liable if you get sued and you’re not covered.
Consider This Before You Buy Tail Coverage
You always want a backstop if you’re sued for any incident with any employer. And you want to ensure you have a long enough tail to cover you. As I said before, occurrence-based insurance doesn’t need tail coverage. But it costs a little bit more per year. It’s about a third more expensive. Let’s say you were paying 3000 a year for your insurance. If you had an occurrence-based policy, it’d be $4,000. So, not a huge price difference between the two, but in the end, it can be huge. Because, if you had a $3,000 annual premium for a claims-made insurance policy, your tail would be $6,000. Whereas with an occurrence-based policy, it would be nothing. So, you must figure out how long you’ll be with an employer to determine which policy is best for you.
Nurse Practitioners and Claims-Made
An NP usually is not given the option if you’re going to work for a physician-owned practice. They’re going to dictate what type of policy you get. And then they’re also going to dictate whether you must pay for the tail or not. Now, that’s something you can negotiate in your employment agreement. You need to look at the policy regarding nurse practitioner malpractice insurance. You need to see what type of coverage they have. Who it’s with, how much it costs per year, and who pays for tail coverage. You need to figure out four things before signing any contract. It’s not prohibitively expensive for an NP.
I mean, let’s say you’re an FNP, it’s usually somewhere between 1500 to 2,500 a year. So, the tail cost would be somewhere between like 3,000 to 5,000. And it’s a one-time cost, as I said before. But still, $5,000 is not an insignificant amount of money. Always having the employer having to buy tail coverage and being the one that foots the bill is more favorable than not. So, that’s the difference between the two policies. What is better for you or another depends on the situation.
Anytime a nurse practitioner is employed, they need professional liability insurance, also known as malpractice insurance. Depending on the policy type, they may need tail coverage. Let’s first break down the different types of policies for a nurse practitioner. Usually, there are two types of main policies for liability insurance. One is called occurrence-based then the other is called claims-made. In an occurrence-based insurance policy, a policy must be in effect when the malpractice occurs. This means tail coverage is unnecessary for occurrence-based insurance.
Which Malpractice Insurance Coverage Needs Tail?
Now, why would someone go with occurrence over claims-made insurance? Well, it’s a math equation, but occurrence coverage generally costs about a third more than claims-made coverage. And I find most employers, some smaller owned physician practices, depending upon what state you are. Maybe a smaller nurse practitioner owned practice if it’s an employer. Normally they’ll have a claims-made insurance policy, and then they’ll pay for the underlying premium. So how much they pay to insure the nurse practitioner per year. Still, they may put the cost of the tail policy upon the nurse practitioner when the contract terminates.
Going back to occurrence-based insurance. You do not need tail coverage for that. So, when you do need tail policy is if there’s a claims-made policy. Which means a policy must be in effect when the claim is actually made. Think of the scenario where an NP leaves an employer. There will be a window from the last patient they see for that employer until the last day that patient can sue the nurse practitioner.
Purpose of Tail Malpractice Coverage
The statute limitation is how long a person must sue someone for malpractice. Normally, in most states it’s two years from when you either knew or should have known that the malpractice occurred. There are some exceptions for minors when they become adults. But a general rule of thumb is two years. In that scenario, the NP would need a policy covering that gap between when they leave. And the last day someone can sue them. That’s called tail coverage, also known as extended reporting coverage. It’s more likely that if the NP is with a smaller group, they’ll have to pay for the tail. Whereas if they’re with the hospital, hospital network, or a large corporate-owned practice, the tail costs will usually go to either hospital or corporation.
So, how much does it cost? Well, tail insurance coverage is around twice what your annual premium is. Most nurse practitioners’ annual premium falls between 1500 to 2250 per year. Let’s say, it’s 1500 a year annual premium. You multiply it by two, and the tail cost will be around $3,000. Now, this is a one-time payment. You do not need to pay every year that you have a tail policy. And then, there are also different lengths for tail coverage. It could just be a short two-year window. Or you could have it indefinitely, it could be for five years, eight years, it just depends. And then the longer the tail, the more expensive it is.
But as I said before, usually it’s going to be on average twice. But anywhere from 150%, all the way up to 300%. Suppose you’re a nurse practitioner and you’re negotiating an employment contract. This certainly could be something you could look at as far as who pays for the tail costs. I mean, it’s not prohibitively expensive for a nurse practitioner. However, it still is going to be thousands of dollars that you’ll have to pay. For NPs jumping around, you don’t want to have to pay two or $3,000 everytime you leave a job. This certainly is something you can negotiate with the employer.
Ways for Your Employer to Buy Tail Coverage
If they’re unwilling to pay for the entire cost. We’ve found success in asking the employer if they would then forgive a portion of it on an annual basis. For instance, we would say to the employer, okay, for every year that the nurse practitioner is employed, you’ll forgive 25% of the tail cost. Or cover 25% of the tail cost. Let’s say, the nurse practitioner has been there for two years, they leave. Then basically, they would split 50, 50 the cost of the tail with the employer. And if they were to stay there for four years and leave, they wouldn’t have to pay for tail policy.
Prior Acts Coverage
Another way of having a tail paid for is having your new employer pay for your old tail. That’s called nose coverage. Some employers will do that. It’s almost like a signing bonus in some way that they’ll pay for your old tail. That’s another way of getting out of it. And then lastly, another way of getting out of it is, many times if you stay with the same insurance company. Let’s say you stay in the same state. Maybe there’s one big insurance company that does a lot of the nurse practitioner coverage.
If you move from one private physician-owned practice to another, using the same malpractice insurance company. Then that new company would roll over your old policy into a new one. And then you wouldn’t have to pay for a tail. Obviously, in that scenario, it’s impossible to know. However, you’re going to go next if they use the same insurance company, but one you think about. So, that’s tail coverage for a nurse practitioner. I’d say high up on the list of things people care about when I’m reviewing a contract with them. But it is important to know the basics.
How much does tail policy cost for a nurse practitioner? First, we need to talk about what types of malpractice insurance, also known as liability insurance, are available. And then when you have a certain type, do you need tail coverage? First, the setting is important. If an NP is employed by a hospital or hospital network, at least nowadays, they’re self-insured, which means tail policy is generally unnecessary. If they do have a claims-made policy, then tail policy is necessary. However, if a hospital or hospital network employs you, a nurse practitioner would rarely have to pay for their tail. When they would have to pay for their tail is in a kind of private practice setting.
2 Types of Malpractice Insurance
If they’re employed by a smaller physician-owned group, or in some states if they have their practice. In that case, two types of malpractice insurance are the most common. One is called occurrence-based and one is claims-made. Now, with an occurrence-based policy, the malpractice incident must only occur while a policy is in effect. It means tail policy is unnecessary. As far as claims-made insurance goes, a policy must be in effect when someone makes a claim. And so, tail policy is necessary for a claims-made policy. To break down claims-made, let’s say, a nurse practitioner is employed with a private physician-owned practice. If they terminate their employment, there is still a gap from when a patient knows the last day the nurse practitioner provided care for the practice.
Usually, there’s a two-year statute of limitations in most states. And in that case, the patient can sue after the nurse practitioner no longer works for that practice. Therefore, a policy must be in effect that covers that gap between when they leave. And then on the last day somebody can sue them. In most states, it’s two years from when the patient either knew or should have known of the malpractice incident. There are also some minor exceptions for minors when they become adults, that type of thing. But for the most part, two years is a good rule of thumb. In the employment contract, if the nurse practitioner has a claims-made policy, it will state who pays for tail policy. If it’s a private practice, I’d say it’s often. The NP would be responsible for it.
Cost to Buy Tail Coverage
As I said before, if they’re in a hospital or hospital network, the hospital will cover it more often than not. If the nurse practitioner is responsible for paying for the tail, it must be purchased generally before or right around the employer’s termination date. And a good rule of thumb is it’s about twice what your annual premium is. Your annual premium is how much the employer must pay to insure you yearly. If you had to pay for tail coverage, it normally is around twice your annual premium, and it’s a one-time payment. You don’t have to pay it every year. It’s all paid upfront and your tail is covered for as long as whatever the length of the tail policy you bought was. Tail policy can have longer tails than others.
I mean, you could theoretically get a one-year tail, two-year tail, or an infinite tail. For most people, five years is an excellent safe amount. If you had a two-year tail, but something happened in year four or five, you are no longer insured, which would be an issue. Now, how much does malpractice insurance cost for most NPs? Usually, it’s somewhere between 1500 to 2,500. So, let’s say it’s $2,000. Then your tail cost would be around 4,000. Not like an enormous amount of money, but certainly something you may want to negotiate before signing the employment agreement.
Ways You Can Get Out of Paying It
A couple of things to think about. If it states that you must pay for the tail, you can always ask the employer to pay for it. That’s one way of doing it. If they’re unwilling to pay the entire amount, sometimes we’re successful in tiering it. Let’s say, you have a three-year term for your contract. You could say the employer will take over one-third of the tail costs each year. So, by the time the three years are over, the employer pays the entire cost of tail coverage.
Another way of getting out of having to pay for it would be if your new employer pays for your old tail. That’s called nose insurance. Or, if you stay with the same insurance company, normally, they’ll roll over your policy wherever your new employer is. And you wouldn’t have to pay for tail coverage. This is something you can negotiate in the contract. Some employers are unwilling to change any terms in the agreement or maybe unwilling to change this term.
And then, if that’s the scenario, you must decide whether it’s a deal-breaker for you or not. So, that’s how much tail coverage costs, usually around twice what your annual premium is. You certainly want to determine your annual premium before signing the agreement. And that way, you can forecast what your tail coverage cost will be.
Should a Nurse Practitioner Choose Claims Made or Occurrence?
Should a registered nurse practitioner choose claims-made or occurrence-based malpractice insurance? Suppose you’re working for a hospital or hospital network. In that case, they’re always going to pay for your underlying premium. So how much they pay for you annually. But it’s also very likely that they will pay for any insurance needed after the employment has terminated. Most of the big networks are now self-insured. Some may offer a claims-made policy, but they’ll almost always pay for the tail. The only time that you’d have to choose between an occurrence-based policy or a claims-made one. Is if you’re out on your own in a state that allows it. Or perhaps you’re in a private practice working with a physician.
How Occurrence-Based Differs from Claims-Made
What are the differences between the two insurance plans? Let’s take occurrence-based coverage first. An occurrence-based insurance policy means that a policy has to be in effect when the malpractice occurs. So, it doesn’t matter when a claim is filed, you’re covered no matter what if you have an occurrence-based policy. No tail coverage is necessary. For a claims-made insurance policy, a policy has to be in effect when the claim is actually made. It’s possible someone could file a claim against you after you terminate the employment. So, you need a gap policy, also known as tail coverage. That covers the gap between when you leave an employer and the last day somebody can sue you. It’s called the statute of limitations. In most states, it’s two years. There are a few exceptions, but let’s just take two years as a guiding principle here.
And so, you would have to get an additional policy that covers that gap. And that’s, as I said before, called tail coverage. Now, let’s talk about cost. Tail is generally around twice what your annual premium is.
Whatever you pay yearly, multiply those times two, and that’s a good estimate of your tail costs. It’s a one-time payment, you don’t have to pay for it every year. But you can choose different policies with different lengths that cover a different amount of time. You could get a tail lasting for two years, three years, or indefinitely, and then the price would change slightly. Obviously the longer, the more expensive it’s going to be. It doesn’t make sense to get a policy not covering the full statute of limitations in whatever state you’re in. You could potentially be personally liable if you get sued and you’re not covered.
Consider This Before You Buy Tail Coverage
You always want a backstop if you’re sued for any incident with any employer. And you want to ensure you have a long enough tail to cover you. As I said before, occurrence-based insurance doesn’t need tail coverage. But it costs a little bit more per year. It’s about a third more expensive. Let’s say you were paying 3000 a year for your insurance. If you had an occurrence-based policy, it’d be $4,000. So, not a huge price difference between the two, but in the end, it can be huge. Because, if you had a $3,000 annual premium for a claims-made insurance policy, your tail would be $6,000. Whereas with an occurrence-based policy, it would be nothing. So, you must figure out how long you’ll be with an employer to determine which policy is best for you.
Nurse Practitioners and Claims-Made
An NP usually is not given the option if you’re going to work for a physician-owned practice. They’re going to dictate what type of policy you get. And then they’re also going to dictate whether you must pay for the tail or not. Now, that’s something you can negotiate in your employment agreement. You need to look at the policy regarding nurse practitioner malpractice insurance. You need to see what type of coverage they have. Who it’s with, how much it costs per year, and who pays for tail coverage. You need to figure out four things before signing any contract. It’s not prohibitively expensive for an NP.
I mean, let’s say you’re an FNP, it’s usually somewhere between 1500 to 2,500 a year. So, the tail cost would be somewhere between like 3,000 to 5,000. And it’s a one-time cost, as I said before. But still, $5,000 is not an insignificant amount of money.
Always having the employer having to buy tail coverage and being the one that foots the bill is more favorable than not. So, that’s the difference between the two policies. What is better for you or another depends on the situation.
https://www.chellelaw.com/wp-content/uploads/2022/07/Blog-62-scaled.jpg14402560adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-04-25 18:28:252023-08-25 17:14:03What is Tail Insurance for a Nurse Practitioner? | Malpractice Insurance