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Occurrence Based Insurance for a Nurse Practitioner Explained

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, 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 that to 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.

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.

And let’s just say you’re going to be there for two years; your underlying policy is $2,000. If it were an occurrence policy, it’s a third more, so let’s just say it’s around 2,700. If you had to pay that for two years, that’s 5,400, and that would be the total amount that you pay for insurance. So, 5,400 for two years. If you had a claims-made policy, it’s 2000, 2000, which is 4,000, but then you’d have to double that for tail cost, which is 8,000, so then it’s 12,000 total versus what we said 5,400. So, you would come out way ahead if you chose an occurrence-based policy if it’s short-term employment. Now, if it’s a longer-term employment or maybe you’re starting your own practice and you plan to be there indefinitely, a claims-made policy might make more sense in the long run.

Most employers do not give the NP the option. You will most likely have the option if you’re working as an independent contractor because you’re the one that has to pay for the policy. There are a few opportunities where they would pay for your annual premium, but those are rare. But for the most part, you do not have the choice of one or the other. And most employers offer claims made and then put the onus for the tail cost on the provider because it’s cheaper for them, it’s a third less per year for them to pay and they don’t have to worry about the tail cost. So, that’s what occurrence-based coverage is. You do not need tail, but it’s a third more expensive.

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Based on 121 reviews.
Melinda Striyle
Melinda Striyle
2022-06-12
Attentive, respectful, great to work with.
Jenn Lighthall
Jenn Lighthall
2022-06-10
Absolutely fantastic. I would give more than five stars if I could. Highly recommend!
Meghna C.
Meghna C.
2022-05-31
Renee was great to work with when negotiating my contract! I am a resident physician signing on for my first attending job, and I felt more comfortable with the language used in the contract after going over it with Renee. I also got a higher starting salary which made the price more than worth it. I would definitely use Chelle Law again!
Jennifer Nevis
Jennifer Nevis
2022-05-30
Erin Howlett saved me from a terrible situation and I can't thank her enough. I had accepted a veterinary dental residency in northern Illinois with a private practice. The letter of intent was routine yet the actual contract so punitive and predatory in nature that it was hard to believe it was from the same people. Erin believed I was worth more than the "Zero" this practice claimed. Without her on my side, I would have naively signed this "bait and switch" and been finacially and professionally ruined if I couldn't complete the 6 year commitment this practice demanded.
robin singh
robin singh
2022-05-27
I consulted with Chelle law for contract review. They were suggested by our employer. Renee osipov was incredibly helpful and was able to navigate me in right direction. I fully recommend them.
Melanie Schlote
Melanie Schlote
2022-05-22
Erin was so professional and very quick to respond. She took the stress away from contract reviewing and made me feel confident in this next step of my career.
Mitul Patel
Mitul Patel
2022-05-22
I contacted Chelle Law for my dental contract review. I am very pleased with contact review with Attorney Renee. Renee was very kind, helpful, honest, informative and knowledgeable. She had some solid advice regarding negotiations. Katie was very helpful to schedule appointment with Renee within few days. I had some questions next day and emailed her and she responded back to me within an hour. I HIGHLY RECOMMEND CHELLE LAW FOR YOUR CONTRACT REVIEW. THANK YOU!!
Anna Etzler
Anna Etzler
2022-05-20
Renee was wonderful to work with and helped me with a contract review for my first NP job. She took the time to help me understand each section of the contract and even helped me successfully negotiate so that the contract would best fit my needs. Chelle Law was very responsive to my needs and set up my initial review and revision review in a timely manner! I would highly recommend their services to anyone in the medical profession.
Alan W
Alan W
2022-05-16
Had the privilege of working with their attorney Renee. She was really thorough, professional, and went above and beyond in reviewing my contract. Couldn't have asked for a better experience.

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