Effective risk management is a critical success factor in health care, especially for medical staffing agencies. A newer approach to managing health care’s ever-evolving risks is having nurses be responsible for securing their own professional liability insurance. This strategy provides protection directly for the nurses, significantly adds another layer of insurance protection for the agency, and ultimately can change the agency’s risk profile. All these benefits pave the way for reduced insurance premiums and decreased exposure. This novel strategy sets pioneering agencies apart from the competition, offering a unique competitive edge in a saturated market.
- Transferring Risk
By requiring nurses to carry their own professional liability insurance and having them add both the agency and the client company as an Additional Insured, staffing agencies can effectively transfer a portion of the risk associated with medical malpractice or errors to individual nurses’ professional liability policies. These policies would be the first line of defense for the nurses, staffing firm, and client company for claims that arise from the nurse’s errors or omissions. This strategic shift protects the agency’s insurance program from a portion of claims.
- Reduce Premium Costs
The presence of additional individual policies for nurses can contribute to a reduction in premium costs for the agency’s liability insurance. Insurance companies find the agencies with an additional layer of individual policies a more appealing client, often resulting in more favorable terms in the agency’s insurance policy. This not only lessens financial exposure but also positions the agency for sustainable growth.
- Expand into High-Risk or Unique Placements
Having individual insurance policies for nurses can allow the agency to venture into high-risk industries that may not have been covered otherwise, such as correctional facilities or psychiatric units. When the agency’s insurance policy is not the first or only recourse for a claim, a wider coverage scope can be provided.
- Protects Nurses Against License Actions
Nurses with their own professional liability insurance are better protected against actions that could jeopardize their licenses. Coverage provided by the agency’s master policy may not adequately cover the claim, making individual policies an important safeguard.
- Enhances Professionalism and Credibility
Nurses carrying their own professional liability insurance are often perceived as more credible and professional, which can be a selling point for the staffing agency to its clients. It demonstrates a higher vested interest in providing superior service.
Having nurses with individual liability policies allows the agency to be more flexible and expand into new and diverse job placements, including high-risk areas that may have been previously inaccessible. Requiring professional liability insurance for nurses is not just prudent, but a business-savvy move for any forward-thinking medical staffing agency.
If you have any questions regarding Nurse-Centric Liability Insurance, please contact a Marsh McLennan Agency advisor.
