Malpractice Insurance for Nurses


by George F. Indest III, J.D., M.P.A., LL.M.
and Jason L. Harr, J.D., M.P.A.

We have all read many articles on why nurses should not buy professional liability insurance. However, in our opinion, there are a number of excellent reasons why every practicing nurse should carry professional liability insurance.

Most articles on this issue adopt the position that if a nurse has a professional liability insurance policy, this will give her a "deep pocket" and make her more likely to be sued in a medical malpractice case against a physician or a hospital. The authors of these articles also often take the position that nurses are usually employees of hospitals and other healthcare entities and, therefore, their employers will provide a legal defense for them. This latter theory relies, in part, on the legal principle of vicarious liability or respondeat superior, which means that the employer is liable for the negligence of the employee; therefore, the employer has a vested interest in defending the nurse from civil claims.

There are several important facts which these articles often overlook which, in our experience, strongly indicates that a practicing nurse should purchase her own professional liability insurance policy.

The Primary Reason for Coverage: To Provide Legal Defense for a Complaint Against the Nurse's License

The primary reason that a nurse should purchase a professional liability insurance policy is that this type of insurance usually includes coverage for legal defense of licensing and disciplinary action commenced against a nurse. Although most nursing liability insurance includes this coverage automatically, some policies may not. Some insurance companies may offer this type of coverage separately to be purchased for a small additional premium payment.

License defense coverage pays the legal fees and costs associated with defending a nurse when an investigation is initiated that may result in action against her nursing license or disciplinary action against the nurse. Coverage is usually available from the time the nurse receives written notice than an investigation by a state agency has been initiated. It will also cover formal complaints made against the nurse, informal hearings before the Board of Nursing, and formal administrative hearings before an administrative law judge.

Since such investigations, complaints, and administrative action may be opened based on such events as patient complaints, hotline calls, Code 15 reports, nursing home and home health agency surveys, abuse investigations by the Department of Children and Families (DCF), newspaper articles, copies of lawsuits, and many other sources. It is far more likely that a nurse will be involved in one of these types of actions than that a nurse will ever be sued for nursing negligence.

How A Professional Liability Policy Protects the Nurse

As noted above, an investigation against a nurse's license may arise from a number of different sources. Statistics provided by the Medical Quality Assurance Division of the Department of Health (DOH) indicate that for the one year period from July 1, 2001 through June 30, 2002, a total of 1,142 investigations were initiated against nurses. For the one year period from July 1, 2002 through June 30, 2003, a total of 1,302 DOH investigations were initiated. Figures were not available on the number of nursing malpractice lawsuits that were initiated during the 2001-2002 period. However statistics obtained from the Department of Health indicate that during the period from 2002 through 2003, only 51 suits for nursing negligence were filed against nurses. We could locate no statistics that indicated the number of notices of intent to initiate malpractice litigation that may have been served on nurses during this period of time; however, a defense for the nurse in these cases would also be covered by such policies. These statistics indicate that a nurse is more likely to be involved in one of these types of licensing actions rather than a lawsuit alleging nursing negligence. These figures show that a DOH investigation is 26 times more likely against a nurse than a malpractice lawsuit.

Professional liability policies which provide coverages for licensure defense will usually provide compensation to the nurse for her out-of-pocket expenses (travel, postage, etc.) that she herself incurs as well as lost wages because of working time missed for hearings, depositions, etc. However, the maximum coverage available under such policies for licensure defense is usually limited. Usually coverage for licensure defense in most policies for nurses is between $10,000 and $15,000. This amount will usually be sufficient to provide for most of the legal fees and costs involved in defense of such a case and will usually be enough for the nurse to be able to afford to hire a highly qualified, experienced healthcare attorney, familiar with nursing law, to represent her.

Does Vicarious Liability Actually Absolve the Nurse From Liability?

The assumption that vicarious liability or the legal doctrine of respondeat superior protects a nurse against a medical negligence claim is a mistaken one. If the employer provides legal representation, the attorney representing the nurse will almost always be the same attorney representing and being paid by the hospital or employer.

In many circumstances, the nurse may conclude that her interests are contrary to those of the hospital or employer, which could result in the attorney hired by the hospital withdrawing from further representation of the nurse. Additionally, it may be necessary for the nurse to raise evidence showing that the injury was caused by another nurse or hospital employee, in order to defend herself. It is doubtful that an attorney representing the employer or hospital would raise this defense since it would prove liability against the employer hospital.

Many employers will not provide legal representation if the matter involves licensing or disciplinary action against the nurse. This could force the nurse to fund all the fees and costs associated with her defense. However, some larger corporations with good risk management programs will provide the nurse with legal representation for such matters.

For example, the authors of this article have represented large national hospital chains and nursing home chains, as well as a local independent nursing home, which routinely provide legal representation for nurses accused of wrong-doing who have a complaint filed against them with the Board of Nursing, Department of Health, or the Department of Children and Families. The authors have also been retained as independent outside counsel to represent nurses by large national nursing home chains and hospital chains when it was felt that there might be a conflict of interest between the corporation and the nurse. This situation might arise, for example, if the nurse is suspected of having committed a criminal act or an intentional act that might also result in civil liability or discipline against the nurse.

If you are an agency nurse, a home health agency nurse, a nursing home nurse, an independent duty nurse, or you are not employed by a large hospital chain, then you should consider nursing liability insurance mandatory. It appears that complaints of negligence against nurses working in these positions are far more likely. This may be because of the high turnover of nurses in some types of healthcare facilities (such as nursing homes), or because when the incident is investigated, the nurse is no longer employed there (for example, in the case of an agency nurse). Additionally, agency nurses may only work in facility for a short period of time making them less familiar with the facility's policies and procedures, and not a part of the permanent team of nurses who may have established relationships with each other and are more likely to cover for each other.

As mentioned above, a number of different proceedings may be covered by the licensure defense coverage provided for in professional liability insurance. These proceedings may include an investigation by the Department of Health based on a patient complaint or Code 15 report; an abuse investigation (abuse of a child, abuse of a developmentally disabled or vulnerable person, or abuse of an elderly person) by the Department of Children and Families (DCF); allegations of nursing negligence or abuse being investigated by a state "surveyor" by the Agency for Health Care Administration (AHCA); an investigation into allegations of Medicaid over-billing or fraud; an investigation by the Agency for Health Care Administration or on the Attorney General's State-wide Medicaid Task Force; and allegations of improper Medicare billing or fraud.

A nurse might be involved in a Medicaid fraud investigation, for example, in the case of an Advance Registered Nurse Practitioner (ARNP), Certified Registered Nurse Anesthetist (CRNA) or Certified Nurse Midwife (CNM) who has her own provider identification number and is allowed to bill as part of a group practice or independently. This might also occur, for example, in the case of a nurse working for a home health agency which receives its reimbursement for the nurse's services from Medicare or Medicaid. We have represented nurses in each of these types of cases.

Cost of Professional Liability Coverage is Minimal

High limits of coverage for nursing malpractice insurance coverage are usually available. Most nursing liability insurance policies provide at least $1,000,000 in coverage. If sought by physicians, this high limit of coverage may be very expensive or often is not available, at all. This professional liability coverage should afford the nurse ample protection in any malpractice case that might be filed against her. When counseling physician clients regarding asset protection, we routinely advise them that the best asset protection is having and maintaining good professional liability insurance coverage. There is no reason that this should not apply to a nurse who may have property, savings or other assets she desires to protect.

Nurses can purchase liability coverage rather inexpensively. For example, an excellent insurance policy providing coverage for nurses is available through the Nurses Service Organization (N.S.O.) for less than $100 per year. Professional liability coverage provided by this type of insurance represents a bargain at these rates.

Focusing on Protecting the Nurse's Individual Interests

Perhaps most importantly, the nurse should have an attorney focusing on her interests only in defending her against any type of negligence or licensing complaint. A nurse with her own professional liability insurance coverage will be able to hire a separate, independent attorney, and often the insurer will allow her to pick her own attorney.

Additionally, it has been our experience that it is better to have several different defense attorneys actively involved in a case rather than to have only one, when defending multiple parties. Having several defense attorneys involved means that the attorney representing the plaintiff (or person filing the claim) has to work much harder in order to prove her case. During the discovery process, each defense attorney is allowed to separately question both fact and expert witnesses. Each separate defense attorney is allowed to file discovery requests. Each separate defense attorney participates in the filing of motions. Relevant facts or issues that are overlooked by one attorney may be picked up by other defense attorneys. A cohesive defense with a unified strategy stands a greater chance of prevailing both before and at trial.

Important Considerations When Purchasing Liability Protection

When deciding on which professional liability to purchase, the nurse should inquire as to the extent of coverage for licensing in disciplinary defense coverage. Some professional liability insurers have a "broad form" of coverage which may provide legal defense for the nurse in almost any type of administrative action. This might include, for example, defense of a discrimination complaint filed against the nurse with the Florida Commission on Human Relations (FCHR) or the U.S. Equal Employment Opportunity Commission and for Medicare and Medicaid complaints. Other companies limit coverage to only actions that may result in disciplinary action against the nurse's license. The nurse should always attempt to get the broadest coverage available for disciplinary defense and licensure defense coverage.

Additionally, the nurse should inquire as to whether or not she will be allowed to select her own attorney. Many insurance companies have contracts with certain law firms to provide legal services on their cases for a reduced fee. The insurance company may require you to use one of its own contracted attorneys, or even one of its in-house attorneys which it employs directly. Given the limited number of attorneys with experience at handling nursing law issues and trying malpractice cases, the nurse should attempt to obtain coverage through a company which allows her to choose her own attorney.

The most important reason to purchase professional liability insurance is for the licensure defense coverage. A nurse does not want to risk losing her nursing license because she was unsuccessful at defending an investigation against her license or did not have the resources to do so. Since there are far more complaints filed each year against nurses' licenses than here are nursing malpractice lawsuits, it is far more likely that a working nurse will need legal defense of a licensure complaint investigation.



George F. Indest III, is the founder and managing partner of The Health Law Firm based in Altamonte Springs and Orlando, Florida. Mr. Indest is board certified by the Florida Bar in the legal speciality of Health Law. He is also board certified as a health care risk manager by the American Board of Risk Management, Inc. He is a member of the American Medical Association's Doctor's Advisory Network and serves as General Counsel for the Florida Chiropractic Physicians Association. His practice encompasses all aspects of business, corporate, transactional, regulatory and administrative health law practice, and he represents physicians, nurses, hospitals, home health agencies, long term care facilities and other health care providers. His practice also includes the litigation of professional licensing cases and business litigation, as well as Medicare and Medicaid audit and defense work. He was selected as the "Best Health Care Attorney in Orlando" by Florida Medical Business for 2000.

Mr. Indest served as in-house counsel at one of the Navy's largest teaching hospitals and was also in charge of the legal and medical risk management programs in the Navy's largest regional health care system which consisted of twenty-seven major hospitals and treatment facilities. He is on the Executive Council of the Health Law Section of the Florida Bar and has served as Chair of the Medical/Legal Committee of the Orange County Bar Association. Mr. Indest received his BA and JD degree, cum laude, from Tulane University and also was awarded an LL.M. degree, with highest honors, from the National Law Center, George Washington University, Washington, D.C., where his course emphasis was in health care law (legal medicine). He is a member of the state bars of Florida, Louisiana and the District of Columbia. Mr. Indest also serves on the Executive Council of the Health Law Section of the Florida Bar and is on the Board of Directors of a nonprofit charity nursing home and a number of other charitable organizations.

Mr. Indest lectures and writes frequently on health care legal issues having a number of publications to his credit. He is also an adjunct professor of health law for the St. Francis University Graduate School, Southern Adventist University Graduate School and for Barry University School of Law.


Jason L. Harr is an attorney whose practice encompasses all aspects of health law emphasizing health care litigation but including business, corporate, transactional work and medical malpractice defense.

Mr. Harr was born in Brussels, Belgium. He received his Bachelor of Arts degree from the Tulane University of Louisiana, in 1994. He earned his Masters Degree in Public Administration from the University of Miami, in 1996. He received his Juris Doctor from Nova Southeastern University, the Shepard Broad Law Center, in 1999. Mr. Harr is admitted to practice in all Florida state courts, as well as the United States District Courts for the Middle District and Northern District of Florida.

Mr. Harr began his legal career at a medical malpractice defense litigation law firm in Daytona Beach, Florida. He worked in all areas of insurance defense including both medical malpractice and workers compensation. Mr. Harr is a member of the American Bar Association, The Florida Bar, the Defense Research Institute, Volusia County Bar Association, The American Association of Nurse Attorneys (TAANA), and the American Health Lawyers Association (AHLA).