InfoLAW: Nurses in Independent Practice: An Overview

Table of Contents

• Which services do you plan to provide?
• Business Structure
• Informed Consent
• Documentation, Confidentiality, and Disclosure
• Contracts
• Professional Liability Protection
• Business Insurance
• Key Takeaways

Nurses in independent practice are self-employed and may provide professional nursing services in a variety of ways, whether it be as an individual, in partnership with other self-employed healthcare professionals, or as an employer of other healthcare providers.

Any business, large or small, has to contend with two aspects of their enterprise: the goods or services they provide, and business matters. Independent practice nurses operate their business while also providing professional nursing services. This publication will explore the relevant considerations to contemplate when entering into independent practice.

Which services do you plan to provide?

Firstly, it is important to consult with the provincial or territorial nursing regulatory body for any resources, guidance, or requirements it may have. For instance, nursing regulators may require information about the proposed professional services, to determine whether the hours spent on that work will count toward any mandatory number of hours needed to maintain nursing registration.

When reviewing the nursing regulator’s standards and guidance documents, be mindful of any documents that identify issues that are governed by legislation (an Act or regulation). Independent practice nurses will be responsible for ensuring compliance with these laws, and therefore may wish to seek out advice from other sources, such as a provincial privacy commissioner’s publications or a lawyer, to obtain additional advice in this area.

Nurses will generally be held to a higher legal standard than a person doing similar work who is not a regulated health professional. For this reason, when identifying as a nurse in advertising and service delivery, it is important to consider whether the professional services being offered fall within the scope of practice of the registration category and that the nurse has the necessary knowledge, skills, judgment, and resources to perform these services. The nursing regulator may also have guidelines about the proper use of nursing titles and advertising nursing services.¹ Clearly communicating what services will be offered, and perhaps what will not be, can help both the nurse and their clients.

Working autonomously can be a significant change from practicing under the direction of an employer and among nursing colleagues. Independent practice nurses do not operate under the direct control of another health professional, employer, or healthcare institution, and are legally accountable for the professional services they provide as well as business matters. They can also be subject to various types of laws and regulations regarding the organization of services, in addition to those that regulate the practice of nursing. These may include: professional discipline; civil lawsuits for professional negligence and for breach of contract (e.g. lease of premises); and privacy law. A nurse should replicate some of the safeguards found in health institutions, such as having policies and procedures that govern privacy, informed consent, and incident reporting, among others. Establishing a professional network of trusted peers and mentors for consultation, and perhaps referral, can also help maintain currency with best practices and ongoing learning.

Business Structure

Prior to establishing an independent practice, it may be beneficial to consult with a business lawyer, accountant, and/or financial advisor to review business structure options (e.g. sole proprietorship). They may also clarify tax and legal implications and any business regulations or bylaws, such as business license requirements. Generally, professionals cannot use incorporation as a way to avoid professional liability.

Informed Consent

Nurses in independent practice have a legal and ethical responsibility to obtain informed consent from patients for any nursing treatment.² There is legislation in each jurisdiction that sets out the law of consent and capacity, consent to treatment, and substitute decision-making. The facts and circumstances of the consent should be documented.

Documentation, Confidentiality, and Disclosure

Documentation is a legal and professional requirement for all nurses, and patient records are created to record relevant patient information so the patient is cared for properly. These records can be used later to re-construct events, refresh memory, and provide detailed evidence of the care provided, all of which may minimize legal risk.³

Independent practice nurses should prepare to act as the health information custodian or trustee of patient health information and health records. Health information custodians or trustees have certain legal obligations concerning the collection, use, disclosure, retention, and disposal of a patient’s personal health information. Confidential⁴ health records must be stored in a secure place and retained for any mandatory period required by law in your province or territory.⁵

Consulting with a lawyer can help a nurse to determine whether they are health information custodians. If they are deemed a health information custodian, a lawyer can also assist with establishing appropriate policies and procedures consistent with the governing privacy legislation in their jurisdiction. The provincial or territorial privacy commission or ombudsman may also have useful resources designed to ensure compliance with privacy legislation.

Contracts

Contracts are used to reflect the agreement between employers and employees and also to describe the agreement between an independent practitioner (usually called an independent contractor) who is to provide services to another party. The other party may be a health institution such as a long-term care facility, a clinic or practice of other health professionals, or a single individual, such as a doctor or patient.

When an independent nurse enters into a contract to provide services, the contract will generally be prepared by the party seeking those services. Alternatively, the nurse’s lawyer may draft a contract to describe the terms of the professional services that will be provided to the patient or the other contracting party. Professional contracts or service agreements vary in length and content (some have been drafted using templates that are intended for work far removed from nursing), and typically include provisions that favour the interests of the party that drafted it.

The contract should stipulate the professional nursing services that are to be rendered, contain provisions that support professional obligations (for example, confidentiality), and anticipate how and when the contractual relationship between the parties might end.⁶

Professional Liability Protection

Nurses eligible for CNPS professional liability protection are called beneficiaries by the CNPS. Eligibility can be verified here.

Beneficiaries are generally eligible for CNPS professional liability protection in an amount up to $10 million per claim for professional negligence relating to nursing care provided in Canada. CNPS professional liability protection applies only to the individual nurse providing professional nursing services. It does not extend to an association, partnership, incorporated company⁷, corporate directors, shareholders, or employees of the business.

In the case where an independent nurse is also working as an employee within another organization, the employer’s insurance will only cover lawsuits that arise out of the employment, not those arising from the independent practice.

Additionally, CNPS professional liability protection (core services) does not include assistance with complaints to the nursing regulatory body. As an employee, a nurse may be eligible for assistance with regulatory complaints through their union, however this is not the case in independent practice. A nurse working in independent practice may therefore wish to consider additional protection for regulatory complaints, such as the CNPS’ Supplementary Protection Program. More information about this program is available here.

Working independently may also create additional legal responsibilities as a tenant, landlord, or employer, all of which may warrant obtaining specific business and legal advice.

Business Insurance

In addition to any professional liability protection that may be required as an individual nurse, should a nurse decide to hire employees or structure their business as a separate legal entity, another source of professional liability protection will be required to respond to potential lawsuits commenced against the business or resulting from the activities of employees, for several reasons:

• When nursing services are provided through a business entity, a plaintiff alleging harm caused by the care or services provided may start legal proceedings against a nurse who provided the care, against the business entity, or both. CNPS protection does not generally extend to a business entity.
• If there are employees, it will be important to keep in mind that as the employer, the independent practitioner or their business can also be held liable for any act of negligence committed by that employee.
• Businesses may also face legal issues unrelated to the practice of nursing: employment disputes; contractual disputes; equipment failure, property damage, etc.
• If electronic health information is managed by the business, that information may be intercepted, lost or stolen.

Consequently, it is important for the business to be adequately insured for potential issues arising from the provision of nursing services and operating a business. What is adequate will vary according to the circumstances, which may change over time.

A business, financial or legal advisor may assist in determining the type and extent of protection or coverage that would be appropriate for the business. Business insurance may be purchased through a commercial insurance broker or through the Nursing Business Solutions (NBS) program (formerly CNPS Business Plus). The NBS program includes different insurance products made available by reputable commercial insurers and brokered by BMS. This business insurance product is exclusively available to CNPS beneficiaries. As such, this program is designed to offer business insurance coverage as a complement to the individual professional liability protection services offered by the CNPS. Further information can be found here.

Key Takeaways: Considerations for Independent Practice

• Consider whether you possess adequate knowledge and skills in the practice area you are considering.
• Consult your nursing regulatory body’s resources for any requirements or guidance they may have about independent practice, including any professional requirements for, or limitations on, your proposed practice. Requirements or limitations may relate to scope of practice, conflict of interest, advertising, solicitation of patients, endorsement of products, and incorporation.
• Become familiar with legislation in your jurisdiction on consent and capacity.
• Become familiar with legislation in your jurisdiction on personal health information, privacy, and your obligations as a health information custodian.
• Build a professional network of peers or mentors for consultation and to help maintain current best practices.
• Seek advice from a business mentor and professionals such as lawyers, accountants, tax and insurance specialists. A business lawyer can review possible business structures and their corresponding legal implications.
• Verify your CNPS eligibility status.
• Consider whether you have adequate business insurance and consider also obtaining additional personal protection for regulatory matters.
• Ultimately, it is the independent practice nurse’s responsibility to address any professional, business, liability, and risk management issues that may arise from their practice.

CNPS beneficiaries who have questions related to independent practice or other legal considerations related to their nursing practice can call 1-800-267-3390.

1. For more information on this subject, please consult our InfoLAW on Cosmetic Nursing.
2. infoLAW, Consent to Treatment (Reviewed June 2018).
3.  infoLAW, Documentation, (October 2020)
4. infoLAW, Confidentiality of Health Information (August 2021).
5. For example, the College of Nurses of Ontario’s Independent Practice (2019) recommends that health records of nursing services be retained for a minimum of 10 years after the nurse- client relationship is terminated. Or, if the client is a minor, for a minimum of 10 years after the client’s 18th birthday.
6. The CNPS offers the review of a contract for professional services if sufficient notice is provided which is confined to professional liability protection and professional legal risk management. A full contract review by your own lawyer would be recommended afterwards.
7. An incorporated company is excluded from CNPS protection but this limit may not apply when the claim arises solely from the provision of professional nursing services, the beneficiary nurse is the sole provider of professional nursing services within the corporation and is the sole shareholder and director of the incorporated company.

Published August 2021

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