Protect Yourself: Why Employer Offered Insurance May Not Be Enough

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As an advocate for the financial well-being of allied health care professionals, one of our goals is to provide beneficial information for the betterment of your career. We’ve posted a number of articles on the importance of Professional Liability Insurance in protecting your reputation and finances in the event an allegation of negligence is brought against you. You can read about what Professional Liability Insurance is here and why you need it here.

An important component of Professional Liability Insurance is employer offered insurance—the coverage offered through an employer or health care facility. If you are covered by your employer’s liability policy, you’ll want to take care to ask details about what level of protection this employer offered insurance coverage affords you personally. Here are some important questions to ask:

What is the limit of liability?           

It’s important the policy has a limit of insurance that provides enough coverage to cover the costs of defending a case at today’s rates. The expenses of hiring an attorney and attending meetings and hearings are costly—not to mention any resulting compensatory damages you may owe if found guilty. A limit of $250,000 may not be enough to provide full protection for all resulting expenses.

Is the policy a shared limit policy?

It’s not uncommon for employer-sponsored policies to be shared limit policies. With this type of policy, all employees are covered as additional insureds under a blanket liability policy in the name of the employer, with one shared limit. This means that just one or two claims within a policy period can potentially exhaust the aggregate limit, leaving little funds for additional claims. This can be very risky if a claim against you is presented late in the policy term and there are no funds left to defend you.

What scope of services are covered? In other words, what specific duties of your employment are covered?

Depending on the complexity or diversity of your job in the health care field, some of the types of work you do may be excluded under your employer’s policy. For example, if your primary role is administrative in nature, any direct patient care may be excluded from the insurance coverage. It’s important to be covered for the full scope of services you provide, because a claim against you can arise out of any part of your professional duties.

You should also be aware that any professional service you may offer outside of your employment (known as moonlighting)—either for pay or as a volunteer—may very well not be covered by your employer-provided coverage if a claim arises. A personal insurance policy ensures you are covered no matter where you work, whether for multiple employers or even as a volunteer.

Is attorney representation provided and expenses covered by the insurance?

It’s not typical that your employer’s insurance policy will provide for attorney representation. A personal Professional Liability policy through Lockton Health offers you this benefit.

Is coverage provided to pay you for lost wages due to time away from work tending to a case against you?

Reimbursement for lost wages is another ancillary benefit not offered by most typical employer-provided liability policies. Lockton Affinity’s Professional Liability policies afford policyholders reimbursement for actual loss of earnings and other reasonable expenses when the policyholder must attend any meetings or hearings associated with a claim—including a deposition—up to a specified limit.

Does the policy offer tail coverage if your employment with the insured employer ends?

Many insurance plans cover only events that occurred while the policy was in effect. Months, or even years, often lapse between when an incident occurred and when the allegation is made. Therefore, it’s important to maintain your insurance in order to ensure that any past incidents are covered.

If the employer-provided policy is a Claims-Made policy, find out if “tail coverage” is offered if you leave that job, or your employment otherwise ends.

Tail coverage is valuable because it extends the period in which incidents that happened during the time period of the policy can be reported—and will be covered. Without tail coverage, any claim filed after the Claims-Made policy expires is not covered.

While the cost of tail coverage can be pricey, it’s a worthy expense to ensure your continued coverage for past claims. There are other options to help you maintain your Professional Liability coverage for past incidents—you can read about them in our article Explaining Claims-Made and Occurrence Policies.

Don’t make the mistake of assuming your employer provides coverage for you, or that it’s comprehensive enough to cover the work you do in your health care field. The best way to protect yourself and your business is to maintain a personal Professional Liability policy throughout your career. Your personal plan will travel with you as you work independently and as you change employers, providing protection to span a lifetime.

Get more valuable tips and information about personal Professional Liability Insurance in our Helpful Info.