When Insurance is Not an Option

By Gary McCammon, AAPA Insurance Services

Adapted from AAPA News, January 15, 2005

 

Henry Ford once said, “People can have the Model T in any color ... so long as it’s black.” Similarly, a PA may choose whatever professional liability insurance he or she wants ... so long as it’s the one the employer will pay for.

 

Traditionally, PAs have had the option of buying an individual policy covering only themselves or becoming insured under their employer’s policy.

 

Although a PA should prefer the first option for a number of reasons, the employer often insists on adding the PA to the practice’s policy. Sometimes this is just a matter of preference, as it is easier administratively to maintain all coverage on one policy rather than keep track of different policies. On the other hand, it is not unusual for physicians to have separate policies while the corporate entity and nonphysician employees share coverage on one policy.

 

Another reason that your employer may insist on insuring you under its plan is because the employer’s insurer insists on it. Some physician insurers exclude coverage for physicians if they supervise nonphysician providers who are not covered on the physician’s policy. The message to physicians from insurers is that any malpractice the physician commits or that is caused by others whom the physician is legally responsible for is covered, except that which is caused by PAs, NPs, CRNAs, or CNMs not named on the physician’s policy. If the physician is sued because it is alleged that the PA made a mistake, the insurance company will not defend the physician or pay any claims for which he or she is liable as the employer or supervisor of that PA. In effect, the insurer is making an offer the physician must refuse. It is not practical to have such a hole in the physician’s coverage just so the PA can have a separate individual policy. It is unclear why this “all or nothing” rule exists, but it is most likely a major reason why a PA is covered by his or her employer’s policy right now.

 

If you’re stuck with your employer’s policy, know that your coverage only extends to your scope of employment. If you have a second job or volunteer in an activity not sponsored by your employer, you need your own policy or you must be covered on the second employer’s policy. If you’re covering temporarily for a PA who is ill or on vacation, his employer’s policy may automatically cover you or — more importantly — it may not. Most professional liability policies allow for coverage of the vacationing physician to be transferred to the locum tenens. You need to know whether it works the same way for you if you’re covering for someone.

 

To be sure, get a “certificate of insurance,” a document that is routinely provided by practices to third parties as verification of insurance. This will tell you who the insurer is, the amount of coverage, and the effective date of coverage. However, it may not specify that you are covered as a temporary employee or locum tenens. You will want a statement included in the “comments” section of the certificate — “[Your Name], PA-C, is a Person Insured” or similar wording — depending on whether the term “Person insured,” “Named insured,” or other term is used to describe one’s status as the party insured by the policy. If some evidence of insurance cannot be provided, you should not work there.

 

That advice holds for any job where you are covered by your employer’s plan. Get an annual certificate of insurance from your employer. The comments section should specify you by name (as shown above) or state “all employees are Additional Insureds” or a similar statement. As an employee, this is your evidence that you have coverage. Keep it in a personal file at home or in a safe deposit box. Keep it forever, as you can be sued for many years following an alleged incident. If your employer’s coverage is claims-made, it is important that you get a new certificate every year, even if you no longer work there.

 

Your employer probably sends you an Explanation of Benefits every year, detailing your health insurance and other employer provided benefits. It is unlikely that it includes details of your professional liability coverage. If not, it is very important that you ask for that additional information. It may seem like an uphill battle to get your employer to do this for you, but Henry Ford had another saying: “If you think you can do a thing or think you can’t do a thing, you’re right.” If we can be of help on this or other insurance issues, contact AAPA Insurance Services at 877/356- 2272.

 

AAPA sponsored insurance plans are offered by insurance professionals and companies (distinct from AAPA) that are solely responsible for all insurance communications.   

 

 

 

Last Revised: 12/20/07