Physician’s Assistant Liability Insurance Shared or Separate Limits?

February 10, 2014

Whether you’re looking to do aesthetic procedures or clinical practice, employed, supervised or independent contractor, you may have to choose between separate or shared limits.

The choice will determine the premium that you pay for the protection. And, since I was just reading that there was $ 44 Million paid out against just Nurse Practitioners in the last five years, the decision of which limits to choose should be addressed.

Sharing limits is not free (as some suspect it should be), but rather it is less expensive! The addition of a shared limit risk (paramedical, allied or other medical professional) extends the risk of the supervising entity or physician, and, thus adds premium to the Named Insured.

Limit of Insurance Defined

The Limit of Insurance is the amount of coverage, the amount of money that the insurance company will pay on your behalf if you have a claim.

Some limits are set up so that the defense of the claim reduces the amount of insurance that you have available under the policy (this is called defense inside the limits); other policies are structured so that the defenses are ‘in addition’ to the limit (which is, naturally called outside the limit).

In the policy terms and conditions page for Physicians Assistant professional liability policies will define the limit clearly (per your request on the application).

Shared or Separate ?

The insurance company places a limit of insurance on each claim. For many healthcare providers, whether they are allied, mid-level of M.D.’s or DDS’, they are required to carry $1 million per claim. And, the decision that some allied and midlevel providers can make is: do they share the supervising physicians’ limit; (of course if you are an independent contractor, with your own health care business, this is not really a viable option.)

So, if you are an employee, you might just decide to share: which means, that the policy would be covering more than just you.

In group, or business settings it is not uncommon to share the limit of the supervising physician. In shared limits, each person or business share up to the single limit.

Sharing Limits,Sharing Claims Experience

Be aware that in medical malpractice insurance, often if you are ‘on’ a policy, which means that you are part of the same policy number, you have, possibly the same limit as either the entity or one or more of the physicians on the policy, you are at some risk for also sharing the claims experience.

If the claim experience of a medical group goes bad, it may bring down the loss experience the physicians on the policy, or the nurse practitioners and Physicians Assistants. It is just naturally inevitable that if a group you belong to is perceived together, and the public sees you as just part of the group, then their claims experience will become your claims experience. This close affiliation may result in the cancellation of your policy, or it may just result in a surcharge, some of a claim being allocated to your limit. These nuances are so important to understand when you go into a contractual relationship with a medical group, hospital, surgery center or another physician.

Each limit of insurance, assuming you are carrying your own coverage carries an aggregate: some aggregates are really high (over 5 Million). and, as I often experience, to use up an aggregate in a single policy year is ..unheard of (almost).

Annual Aggregate Limit

For claims-made carriers, the annual aggregate limit is the maximum amount the carrier will pay for all claims arising from incidents that occurred and were reported during a given policy year. For occurrence carriers, the annual aggregate limit refers to the maximum amount the carrier will pay for all claims arising from incidents that occurred during a given year of insurance.

Thank you for contacting us, we appreciate you visiting our website. We are available to discuss any questions you may have about medical malpractice insurance.