Ask a Lawyer: Employer-Provided Professional Liability Protection

Question: 

As a nurse, do I have sufficient professional liability protection through my employer or clinic?

Answer: 

Professional liability protection (PLP) is now widely recognized as a requirement of practice. This provides a source of adequate compensation for patients harmed in the provision of care and protects nurses from the financial consequences of a civil claim.

In most Canadian provinces and territories, nurses of certain designations become eligible for CNPS Core Services (professional liability protection) via registration with a nursing regulator or provincial nursing association that mandates it.

In some provinces, while there is a mandatory requirement to obtain PLP, it may be acceptable for nurses to rely on PLP offered by the employer. For example, in Ontario, nurses must individually obtain and maintain PLP in a form and amount that meet the requirements set out by the provincial nursing regulator. In doing so, they can rely on PLP made available by their employer, provided that it meets these requirements. If you practice in one of these jurisdictions, you may wonder why it would be beneficial for you to have individual PLP when a form of PLP is already available from your employer.

What your employer will typically provide

Employers can be held responsible for their own acts of negligence (also sometimes referred to as “errors and omissions”) as well as those of their employees, pursuant to the principle of vicarious liability. Consequently, most employer organizations will structure their own PLP to also cover the individual professional liability of their employees. This is typical in the case of large institutional employers, such as hospitals or health authorities. This means that a nurse who is named in a lawsuit may be covered under the employer’s insurance policy and the employer’s liability insurer may assist in defending the matter on behalf of the employee. Nurses should not assume, however, that they will necessarily have PLP from their employer simply because they are an employee.

Keep in mind, employer insurance policies are subject to specific terms and conditions

It is important to be cautious when considering relying solely upon an employer’s insurance policy to provide coverage in the event that a claim or complaint is made. Here are some elements to consider.

1. There is no prescribed minimal limit of coverage that an employer must obtain for the organization or its employees. The insurance maintained by the employer will have a financial limit which may not be sufficient to cover the financial damages claimed by the patient bringing the lawsuit, depending on the extent of their injuries.
2. Any coverage limit under an employer’s insurance policy would typically be a limit that is shared by the organization and all of the other employees covered under the policy. It is important for nurses to understand that the coverage available to them may therefore be eroded in the event that the organization has faced other claims, even if they were not involved in these claims.
3. It is important to remember that coverage under a professional liability insurance policy typically provides coverage for claims for financial compensation (“lawsuits”) based on acts of negligence (“errors and omissions”). This means that the employer’s insurance policy may not provide coverage for all types of proceedings in all cases, depending on the particular policy in place and the nature of the allegations. For example, allegations of abuse, sexual abuse, breach of privacy and other conduct generally categorized as deliberate or intentional rather than inadvertent or “negligent” conduct are often excluded from coverage. Additionally, employer professional liability insurance policies often do not include coverage for other types of professional liability risks that nurses may face (e.g. police investigations and criminal proceedings, complaints made to the nursing regulator, etc.).

Nurses should also be aware that the coverage provided by an employer’s professional liability insurance will be limited to nursing services provided during the course of the nurse’s employment with that organization. It will generally not extend coverage to nursing services provided outside the scope of employment, for example, if you maintain a separate independent practice or provide services as a volunteer nurse.

What should independent contractors keep in mind?

Nurses who are self-employed or who work as independent contractors should also keep in mind that the person and/or organization for which they are providing services will likely not have additional professional liability insurance on their behalf. Generally speaking, employers will only provide additional insurance coverage on behalf of their employees and will not do so for nurses who are working as independent contractors. Nurses in independent practice should ensure that they have adequate professional liability protection or professional liability insurance in place, and should also consider whether they require any additional business insurance coverage for their independent practice. This may include liability insurance for their business or to cover any employees they might hire.

What can I do to confirm my employer’s professional liability coverage?

It would be prudent for nurses to confirm with their employer and/or workplace whether or not they have additional professional liability insurance on their behalf. You may want to consider taking the following steps:

• Obtain written confirmation of your employment status with your workplace;
• Obtain written confirmation of any professional liability insurance maintained on your behalf by your workplace, including a copy of any applicable insurance policies;
• Determine what financial limits or exclusions are included in any applicable insurance policies;
• Consult your employment and/or nursing services agreement to confirm if it includes any requirements with respect to maintaining insurance coverage;
• If you are sued as a result of your activities in the workplace, notify your employer; and seek written confirmation that your employer’s professional liability coverage will extend to you personally and cover all amounts that you may be ordered to pay by the court, in case of a finding of liability;
• If your workplace or employer’s liability insurer defends a claim against you, cooperate with the insurer and the lawyer representing you.

CNPS beneficiaries can contact CNPS at 1-800-267-3390 to speak with a member of CNPS legal counsel. All calls are confidential.

Published October 2019, reviewed in June 2022.

THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. NOTHING IN THIS PUBLICATION SHOULD BE CONSTRUED AS LEGAL ADVICE FROM ANY LAWYER, CONTRIBUTOR OR THE CNPS. READERS SHOULD CONSULT LEGAL COUNSEL FOR SPECIFIC ADVICE.