Side Gigs and Malpractice Risk: What Your Policy Might Not Cover
More providers are picking up shifts outside of their primary employer or practice. Per the Advisory Board, nearly 40% of providers have reported having a source of secondary employment, but we suspect that the percentage is even higher. Moonlighting, locum tenens work, and taking on medical director and supervisory roles are becoming increasingly commonplace.
But here's the problem: most providers assume their existing malpractice coverage follows them wherever they practice medicine. It often doesn't.
The need for side gigs malpractice insurance must be assessed prior to starting any new role. It’s important to be certain that you’re covered for your activities and that it makes financial sense. Your business model should consider the cost to adequately protect you and your assets prior to taking on any additional work.
Why Your Primary Malpractice Policy May Leave You Exposed
Employer-sponsored malpractice insurance is designed to cover you for the duties you perform for that employer. When you step outside that defined scope, your coverage often stops at the door.
Most med mal policies only respond to claims that arise from services performed on behalf of the employer (or first named insured on the policy). A weekend shift at a nursing home or medical directorship work at a med spa shouldn’t be covered under your employer’s policy.
The same can be true if you carry a solo med mal insurance policy in your name. Your insurance company may be unwilling to cover work at different venues and many specifically exclude coverage for medical directorship duties, for example.
Common Malpractice Coverage Gaps in Physician Side Gigs
Facility med mal. Many providers assume that a facility will cover them. Either that isn’t the case or the facility itself is uninsured. If the facility (e.g., med spa, nursing home, hospice, etc.) doesn’t have its own med mal, then you become the main target. In fact, if the facility is uninsured, it may be impossible for you to find coverage for your work there altogether. Always verify coverage for the facility first.
Supervisory liability. When a side role involves oversight of other practitioners your exposure can extend to their clinical decisions, not just your own. This can be especially troublesome when there are multiple insurance policies in place for the different providers. What if the provider you’re supervising doesn’t pay their med mal bill or the facility is uninsured? Gaps can be created and you don’t want to be the only one on the hook should a claim arise that involves multiple defendants.
Exclusions apply. Many med mal policies will specifically exclude medical directorship coverage and work in specific venues (e.g., nursing home, long-term care, skilled nursing facilities, correctional facilities, etc.). Your med mal policy likely already spells out that coverage doesn’t extend.
How to Evaluate Whether You Need Separate or Expanded Coverage
The right approach to side gigs malpractice insurance depends on what you're doing, how often you're doing it, and what coverage already exists. Here are key questions to work through:
Are you an employee or independent contractor? Independent contractors are typically expected to provide their own med mal.
Are you the first named insured on the med mal policy or is it your employer’s policy?
Does this new role fall within the scope of your specialty and training? If not, be prepared for carriers to feel hesitant to include coverage or they may opt to decline it entirely.
What specific exclusions are listed in your med mal policy?
Is the facility insured? Are they providing coverage?
Are you contractually obligated to make any changes to your coverage? Like increasing your med mal limits, for example?
What about tail? Will this need to be purchased if you leave the gig? Always be sure to negotiate tail costs upfront with any new perspective job opportunities.
What is the tipping point financially for this business venture to not be viable? If you need to get a separate policy or pay additional premium to add this work to an existing policy, when is the insurance more expensive than the paycheck you receive?
Not sure how to answer the questions above or tackle the med mal piece? That’s exactly what we’re here for. We help you identify what's covered, what isn't, and strategize how to best approach it. Our job is to help you decide if a job is worth the risk and potential financial gain from a med mal perspective.
Don't Assume — Verify
The most common mistake providers make is assuming they have coverage that turns out does not exist. In the world of malpractice insurance, assumptions are expensive.
If you've taken on any additional work recently or are considering it, now is the time for us to do a coverage audit. We can review your current coverage and any contractual obligations to determine what coverage exists, if any. If there are gaps, we can help you add coverage to your current policy or obtain separate coverage for this new side role.
Have Questions About Your Coverage?
L&J specializes in matching healthcare providers with the right malpractice coverage for their full scope of practice. Get in touch to discuss your current situation and explore your options.