Many nurses often wonder if purchasing their own, individual professional liability insurance, in which they are the named insured, is really necessary. The following case is one to consider when deciding if you are going to purchase professional liability protection for yourself. (1)
Sharona Cohen, an R.N., was a genetic counselor working with Dr. Andrew Gardner. Dr. Gardner provided OB GYN services and genetic counseling to his patients. A client sued Ms. Cohen and Dr. Gardner and alleged that Ms. Cohen had “negligently rendered counseling services”. (2) Ms. Cohen believed she should be covered under Dr. Gardner’s policy and filed a declaratory judgment action seeking a verdict in her favor without a trial that she was indeed covered under the Dr.’s professional liability insurance policy.
During lower court proceedings, the language of the policy was brought into question in terms of the coverage, if any, it afforded Ms. Cohen. The policy clearly covered Dr. Gardner (he was referred to as “you” in the policy), his solo practice, his administrator, a substitute physician, and his estate. (3)
The policy also contained the following language:
“Be sure you understand that you are not covered under this policy for the acts of
of certain people in your employment for whose conduct you are responsible unless
they are insured under a separate professional liability insurance policy…” (Emphasis
The policy went on to state that if employees were covered under a separate professional liability insurance policy, Dr. Gardner’s insurance would cover the excess of the vicarious liability claim coverage provided by the employee’s policy. It also listed certain individuals who would be excluded from this coverage section: employed physicians, physicians’ assistants, specialists’ assistants, nurses providing anesthesia services, nurse practitioners, and nurse midwives employed by Dr. Gardner. (4)
In the lower Motion Court, Ms. Cohen argued many issues, one being that since she was not named in the exclusions listed in the policy (she was not providing anesthesia, nurse practitioner or nurse midwife services), she should be covered under Dr. Gardner’s policy. At best, she argued, the language was ambiguous as to coverage. The Motion Court agreed with this ambiguous language argument. That decision was appealed to the Appellate Division of the New York Supreme Court and it’s decision appealed to New York highest court.
The appellate court held that there was no evidence to support the argument that Ms. Cohen would be covered under his policy given the above circumstances. Moreover, the policy’s coverage language, standing alone, the court opined, does not provide professional liability insurance coverage for certain individuals [pursuant to the policy’s terms] (5), absent compliance with the other provisions of the policy.
The appellate court’s findings were reviewed and a Slip Opinion issued by the New York’s highest court. (6) It was determined that Ms. Cohen was not an employee of Dr. Gardner’s but rather an independent contractor. Further, Dr. Gardner’s policy covered medical incidents (such as surgery, births) and Ms. Cohen did not render any medical care that resulted in a medical incident. In addition, Ms. Cohen was not a “Leased Employee” or a “Temporary Worker” (individuals who would be covered under the policy). Therefore, the opinion stated, the appellate court’s decision must stand and no summary judgment would be entered in favor of Ms. Cohen. Thus, no coverage was available for her under the Dr.’s professional liability insurance.
This case illustrates several points in regard to professional liability insurance policies:
- You need to purchase and maintain your own professional liability insurance policy;
- If you are an independent contractor, you must purchase your own professional liability policy;
- If you are an independent contractor and have employees of your own, you need to make certain the employees are covered under your policy or that they purchase their own policy;
- If you are an employee, or purchase your own policy, carefully read the professional liability insurance policies and/or any others upon you rely (e.g., an employer’s policy);
- When unclear about a certain provision or provisions in a professional liability insurance policy, seek clarification from the insurance company’s agent;
- If relying on an employer’s professional liability insurance policy, ask for a copy or ask to read the policy in order to determine if you are a named employee, if you are covered under an endorsement to the policy, or if you are excluded from certain provisions, as examples;
- Carefully scrutinize the definition of nursing practice in any policy and decide if it includes your role at your place of work or your role as an independent contractor;
- When purchasing your own professional liability insurance policy, obtain as much coverage for individual and aggregate claims during the policy period as you can afford; and
- If you are purchasing your own professional liability insurance, purchase an occurrence policy rather than a claims-made policy.
- Cohen v. Medical Malpractice Insurance Pool of New York State, 56 A.D. 3d 2008.
- A. David Tammelleo (2008). “NY: Nurse Not Covered Dr.-Employer’s Policy:
Nurses Should Have Their Own Professional Ins”,49 (7) Nursing Law’s Regan Report, 3.
- Cohen, supra note 1.
- Cohen v. Medical Malpractice Insurance Pool of New York State, 2010 N.Y. Slip Op. 30784(U) (2010).
THIS BULLETIN IS FOR EDUCATIONAL PURPOSES ONLY AND IS NOT TO BE TAKEN AS SPECIFIC LEGAL OR ANY OTHER ADVICE BY THE READER. IF LEGAL OR OTHER ADVICE IS NEEDED, THE READER IS ENCOURAGED TO SEEK SUCH ADVICE FROM A COMPETENT PROFESSIONAL.