How Much Does Tail Insurance Cost for a Nurse Practitioner? | NP Tail Liability Rates

How much does tail insurance cost for a nurse practitioner? First, we need to talk about what types of malpractice insurance are available, and then when you have a certain type, do you need tail insurance? First, the setting is important. If an NP is employed by a hospital or hospital network, usually, at least nowadays, they’re self-insured, which means tail insurance generally is not necessary. If they do have a claims-made policy, then tail insurance is necessary. However, if you’re employed by a hospital or hospital network, it is very rare that a nurse practitioner would have to pay for their own tail. When they would have to pay for their own tail is in a kind of private practice setting.

Two Types of Insurance for Smaller Physician-owned Group

If they’re employed by a smaller physician-owned group, or in some states if they have their own practice. In that case, two types of insurance are the most common. One is called an occurrence-based and one is claims made. Now, with an occurrence-based policy, the malpractice incident only must occur while a policy is in effect and meaning tail insurance is unnecessary. As far as claims made insurance goes, a policy must be in effect when the claim is made. And so, tail insurance is necessary for a claims-made policy. Just to kind of break down claims made, let’s say, a nurse practitioner is employed with a private physician-owned practice. If they terminate their employment, there still is a gap from when a patient knows the last day that the nurse practitioner provided care for the practice.

Two -Year Statute of Limitations

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 kind of covers that gap in between when they leave and then the last day, they can be sued by somebody. As I said before, 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 kind of a good rule of thumb. In the employment contract, if the nurse practitioner has a claims-made policy, it’s going to state who pays for tail insurance. If it’s a private practice, I’d say it’s often, the NP would be responsible for it.

As I said before, if they’re in a hospital or hospital network, more times than not, the hospital is going to cover it. If the nurse practitioner is responsible to pay for the tail, it must be purchased generally prior to or right around the date of termination with the employer. And a good rule of thumb is it’s about twice what your annual premium is. Your annual premium is simply how much the employer must pay to insure you each year. If you had to pay for tail insurance, it normally is around twice what your annual premium is, and it’s a one-time payment. You don’t have to pay for 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 insurance can have longer tails than others.

Nurse Practitioners’ Malpractice Insurance Cost

I mean, you could get theoretically one year tail, a two-year tail, or an infinite tail. For most people, five years is kind of a good safe amount. If you had a two-year tail, but then something happened in year four or five, you are no longer insured, and it 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 just 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 prior to signing the employment agreement. A couple of things to think about: one, if any, 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.

Malpractice Tail Coverage

If they’re unwilling to pay the entire amount, sometimes we’re successful in kind of tiering it. Let’s say, you have a three-year term for your contract. You could say one-third of the tail costs will be taken over by the employer for each year they’re there. So, by the time the three years are over, the employer pays the entire cost of tail insurance. 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 will just roll over your policy wherever your new employer is, and you wouldn’t have to pay for tail insurance. This is something you can negotiate in the contract. Now, some employers are just simply unwilling to change any terms in the agreement, or maybe unwilling to change this term. And then, if that’s the scenario, you must make the decision of whether it’s a deal-breaker for you or not. So, that’s how much tail insurance costs, usually around twice what your annual premium is. You certainly want to find out what your annual premium is prior to signing the agreement. And that way you can forecast what your tail insurance cost will be.

Nursing Professional Liability Insurance

What is occurrence-based malpractice insurance coverage for a nurse practitioner?  If you’re a nurse practitioner and you’re out in either private practice, meaning, you’re working for a physician-owned practice, or perhaps you own your own practice in a state that allows it, there are going to be two types of insurance that you can utilize. One is called claims-made coverage, and the second is occurrence-based coverage. What is claims-made? Claims-made coverage simply means that a policy has to be in effect when the claim is actually made. You could be with an employer and then the contract would terminate for whatever reason, and then that policy is done. It only covers you for the time when you were there.

So, there would need to be a gap policy also known as tail insurance that covers the gap between when you leave the employer and then the last day somebody can sue you. For most states, that’s two years, and that’s called a statute of limitations. Basically, it’s a limitation on filing a suit against somebody. And for Med Mal claims in most states, it’s two years. And you would need that policy to cover your gap so that if you did get sued during that time, you would be covered. Now, as far as tail insurance is concerned, it’s usually about twice what your annual premium is, and your annual premium is just how much the employer pays for you to be insured on a yearly basis. I’d say most NPS, at least their annual premiums are probably around $2,000.

Nursing Malpractice Insurance Quote

It is specialty-dependent, but let’s just say it’s an FNP, so somewhere between 1500 to 2,500 is a pretty good estimate. Your tail would be twice that if you were responsible to pay for it. So, that’s claims made with tail insurance. Now, this blog is about occurrence-based insurance. An occurrence-based policy simply means a policy has to be in effect when the claim or the malpractice incident occurs. No tail insurance is necessary for an occurrence-based policy. Now, why would someone choose one over the other? Well, it’s the price. An occurrence-based policy is about a third more expensive per year than a claims-made policy, but because you don’t have to pay for tail insurance, it can be a better option for some. And so, think of it this way: if you’re going to be with an employer on a short-term basis, meaning, you start a job and you’re only going to be there for a year or two, maybe you’re an independent contractor and it’s up to you to get the insurance, well, if you had an occurrence-based policy, yes, it’s a third more expensive per year, but you don’t have that two times annual premium tail cost on the end.

Nurse Practitioner | Peace of Mind For a Small Price

The hectic nature of the work that nurses do is good enough reason all by itself to consider getting malpractice insurance to keep yourself covered and protected. After all, the cost of the insurance is a small price to pay for some peace of mind when you are working with your patients. Wouldn’t you rather be able to focus all of your attention and energy on your patient instead of being constantly distracted by a nagging worry that you might be doing something wrong? 

Defend Your License and Protect Your Assets

A nurse’s license is his or her lifeline to be able to work in the career that they have worked so hard to build. They spend countless hours hitting the books and doing clinical work in order to be certified as a registered nurse who is licensed by the state to provide medical care to patients. After all of that hard work and struggle, wouldn’t you want to protect your license at all costs? That is what malpractice insurance can help you do. If you are sued as a result of the care that you provided to a patient, your malpractice insurance will help protect your license from being revoked in many cases. 

Additionally, your insurance policy can protect valuable assets that you have in your name from being taken away as a result of a lawsuit. For example, if you own your home, vehicle, or another tangible asset that could be taken away from you as a result of a lawsuit, you need coverage.

Protection Outside of a Given Medical Institution

Some nurses think that they don’t need to purchase a malpractice policy of their own because they already have one through their employer. It is true that many hospitals and doctors’ offices provide nurses with a limited malpractice policy as part of the contract that they sign when they agree to work there. However, those policies have a limited scope of usefulness, and you may be surprised to learn that they won’t cover the nursing work that you do outside of the building where you are employed. In some cases, even if the outside event is sponsored by your employer, it still may not be covered by your malpractice policy through your employer. 

Should You Contact an Attorney About Malpractice Provisions in Your Contract? 

Have you ever stopped and wondered if there was a reason why you should perhaps stop and contact a nurse practitioner contract attorney about the various provisions written into your nursing contract? You are not wrong for having this thought. 

An attorney can go over the questions you may have about your contract to ensure that it is a safe contract for you to sign: 

• Does it provide adequate malpractice insurance for you? 
• What are the stipulations attached to the malpractice insurance that is provided? 
• Are there reasons to believe that you should purchase additional malpractice insurance on top of what is automatically provided by your employer?
• Is there anything else that you should ask for from your employer before accepting the position (such as the removal of a non-compete)? 

Your attorney is on your side in all of these matters, and he or she will look out for you in ways that no employer ever will. Scanning through contracts to look for anything that might raise a red flag is what these professionals are paid to do. 

Consultation with Chelle Law

Hiring an attorney to go over your contract takes just a short amount of time and a small amount of money to buy you the peace of mind that you want when you dive into a new job. If you would like to get a meeting set up with one of our talented professionals who can go over every aspect of your contract line by line, we strongly encourage you to contact us and let us know how we can be of assistance today.