NsureMedix

Is Your Employer’s Malpractice Insurance Enough? What It Doesn’t Cover

Your employer’s policy protects the facility, not you—and it can leave you exposed if a claim happens after you leave or if they refuse to defend you.

By InsureMedix Editorial · 5 min read

The Uncomfortable Truth About Employer-Provided Malpractice Insurance

Most healthcare professionals assume that if they’re covered by their employer’s malpractice insurance, they’re safe. That’s what the assisted living facility told the nurse practitioner in a real case detailed by Berxi: she had employer coverage, so she thought she was protected. But when a patient fell, was transferred to the hospital, and later died, the facility’s insurer refused to defend her. She was left facing a lawsuit alone—until her own supplemental Berxi policy stepped in. That story is more common than you’d think.

Your employer’s policy is designed first and foremost to protect the facility, not you. It can have gaps that leave you personally on the hook for legal fees, settlement costs, and even licensing board complaints. Here’s what your employer’s insurance likely doesn’t cover—and why you need your own policy.

What Employer Insurance Usually Leaves Out

1. License Defense

If a patient files a complaint with your state licensing board, your employer’s policy almost certainly won’t cover the cost of your legal defense. Defending your license can cost thousands of dollars—and losing it ends your career. Individual policies from carriers like HPSO and Proliability typically include license defense coverage (e.g., up to $25,000 per incident with HPSO, $25,000 with Proliability).

2. Coverage After You Leave the Job

Employer policies are usually “claims-made”—they only cover claims filed while the policy is active. If a patient sues you six months after you quit, your former employer’s policy won’t cover you. You’d need “tail” coverage (extended reporting period), which can cost 1.5 to 2 times your annual premium. Individual policies, especially “occurrence” policies like those from Berxi or CPH & Associates, cover incidents that happened during the policy period, no matter when the claim is filed—no tail needed.

3. Settlement Control

Your employer’s insurer can settle a claim without your consent—even if you want to fight it. That settlement goes on the National Practitioner Data Bank (NPDB) and can haunt your career. With your own policy, you typically have a say in settlement decisions.

4. Moonlighting, Volunteer Work, and Side Gigs

If you pick up extra shifts at a clinic, volunteer at a free health fair, or see patients outside your main job, your employer’s policy won’t cover you. Individual policies follow you wherever you practice.

How Much Does an Individual Policy Cost?

Prices vary by profession, state, and coverage limits, but here are typical annual ranges (not exact quotes):

For many professions, that’s less than a dinner out each month. And the coverage can save your career.

Real Story: “My Employer Refused to Cover Me”

The Berxi case mentioned earlier is a stark example. The NP worked at an assisted living facility that provided her with malpractice insurance. When a patient fell and died, the family sued. The facility’s insurer denied coverage—no explanation given. The NP had to hire her own lawyer. Fortunately, she had a supplemental Berxi policy that covered her defense. But if she hadn’t, she’d have faced the lawsuit alone, potentially paying tens of thousands out of pocket.

According to the NPDB, 26% of all medical malpractice payments from 2012–2022 were made against non-physicians—nurses, therapists, techs, and others. And HPSO reports the average malpractice lawsuit against an occupational therapist costs $60,299. That’s more than most people have in savings.

What to Look for in an Individual Policy

When shopping for your own policy, focus on these features:

Compare carriers like HPSO, Proliability, Berxi, CM&F Group, and CPH & Associates. Many offer discounts through professional associations (e.g., APTA members get 10% off with HPSO; ABMP membership includes occurrence coverage for $199/yr).

Who Really Needs Their Own Policy?

If you answer “yes” to any of these, you should get your own policy:

Even if you’re a full-time employee with no side work, the risk of a post-employment claim is real. A claim can be filed years after an incident—and if you’ve left the employer, you’re on your own without individual coverage.

A Quick Caveat

Final premium quotes come from the carrier at the time of application. The ranges above are estimates based on publicly available data; your actual rate may differ based on location, specialty, claims history, and coverage limits. Always compare quotes from multiple carriers.

For profession-specific guidance, see our guides for nurse practitioners, registered nurses, therapists, psychologists, social workers, physical therapists, occupational therapists, dental hygienists, pharmacists, massage therapists, and notaries.

Frequently Asked Questions

My employer covers me — do I still need my own policy? +

Yes, in most cases. Employer policies protect the facility first, rarely include license defense, end when you leave the job, and can settle without your consent. An individual policy fills these gaps. For many professions, it costs as little as $100–$150 per year.

Does employer insurance cover license defense? +

Almost never. Employer policies typically exclude defense of a licensing board complaint. Individual policies from HPSO, Proliability, and others include license defense coverage (e.g., up to $25,000 per incident).

What happens to my coverage when I change jobs? +

Your employer’s policy ends the day you leave. If a claim is filed after that, you’re not covered unless you have tail coverage (which can be expensive) or an individual occurrence policy. An individual policy stays with you regardless of employment.

Related profession guides

Nurse Practitioner Registered Nurse Social Worker

Sources

Last reviewed: 2026-07-07