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Make sure malpractice insurance covers liability claims

Ambulatory Safety Monitor, March 10, 2004

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As a healthcare provider, you can either purchase your own medical malpractice insurance or receive coverage through your employer. If your employer offers coverage, it's a good idea to also obtain your own policy from a company that looks after your own interests, says John Fetcho, the director of AANA Insurance Services out of Park Ridge, IL. AANA Insurance Services is a subsidiary of the American Society of Nurse Anesthetists (AANA), which provides medical malpractice insurance for CRNAs.

If you depend on the coverage provided by your employer and become involved in a claim, your employer might decide that even if you didn't do anything wrong, it won't fight the case if it's cheaper to settle, Fetcho says.

By law, organizations must report claim payments to the National Practitioner Data Bank (NPDB). Employers check the NPDB when hiring employees and look for claims, which can hurt your chance of employment.

"In settlement situations, if a possible employer sees a claim for $25,000 against you, you'll have to say, 'It's not my fault, the provider decided to settle,' " Fetcho says. "It is like a scarlet letter."

Insurance premiums differ by state, depending on how litigious a state is. For example, insurance costs for Certified Registered Nurse Anesthetists (CRNAs) run anywhere from $1,000 to $10,000 a year.

Investigate the background of the insurance company and review the coverage provided-or not provided-in the policy. A well-rounded company that covers more than medical malpractice has less of a chance of going bankrupt due to increased jury awards and insufficient medical malpractice premiums.

When the Pennsylvania Hospital Insurance Company (PHICO) went under a few years ago, 500 CRNAs lost coverage, Fetcho says. Among other things, PHICO was not diversified to keep up with inflated jury awards. Therefore, pay attention to which insurers out there experience financial difficulties that could jeopardize your insurance, Fetcho says.
 
Why is insurance important? Because medical malpractice insurance pays legal bills and anytime you have a claim against you, you will incur legal costs.

It costs on average $10,000 to defend yourself in a claim. "If you are involved in a claim and don't have insurance the financial impact can be devastating," he says.

Contact your professional association with questions about medical malpractice insurance options. Most associations offer a sponsored medical malpractice program, and the program administrator can answer your questions.

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