One of the attractive benefits of 1099 work as a CRNA/nurse anesthesiologist is the autonomy to control your career and your future. However, that freedom also requires you to make difficult decisions such as choosing malpractice insurance. The process can be challenging, but it’s essential as an independent contractor to have malpractice insurance that protects you, your business, and your reputation.

As you’re considering your malpractice insurance options, this article is a valuable resource that can help guide your decision.

Types of Malpractice Insurance Policies

1099 CRNAs/nurse anesthesiologists have two main types of malpractice insurance coverage to consider: claims-made and occurrence policies. John Culbertson, AANA Vice President of Insurance Services, breaks them down:

Occurrence: These policies pay claims as long as the event occurred during the policy period, regardless of when the claim is reported.

Claims-made: These policies pay claims as long as the event happened during the coverage period, and the claim also must be reported during the coverage period.

Sometimes, a CRNA/nurse anesthesiologist needs to purchase something called tail coverage. This is necessary when cancelling or ending your claims-made coverage and your new malpractice policy doesn’t include prior acts coverage. Tail coverage addresses past incidents. Common scenarios include:

  • Switching from claims-made coverage to occurrence coverage
  • Changing insurance carriers
  • Needing more time to report a claim post-coverage
  • Retiring and canceling your policy
  • Moving to a different state not covered by your current policy

Culbertson advises sticking to occurrence coverage if possible to avoid the need for tail coverage. “It’s better, more efficient, and even a lower price,” he said. “It makes it a lot easier.”

The Importance of Consent-to-Settle Clauses

For 1099 CRNAs/nurse anesthesiologists, consent-to-settle clauses are crucial. In simple terms, this clause prevents your insurance carrier from settling a claim without your consent. This ensures that any settlement protects your business — in both the short term and long term.

“The insurer wants to settle for the lowest cost to them, and that might not always line up with what the right answer is for your professional reputation,” Culbertson said. “The decision around how a particular claim is settled can affect you for decades. It can affect the price you pay for insurance; it can affect your professional reputation.”

Access to consent-to-settle clauses is one of the benefits of working as a 1099 CRNAs/nurse anesthesiologist compared with coverage that an employer might have on your behalf. W2 employees are typically covered under their employer’s malpractice insurance, which typically do not include consent-to-settle clauses.

“You’re in a different position to manage your own career when you’re covered under your employer’s plan,” Culbertson said. “When I ask CRNAs the question, ‘Have you seen instances where the professional reputations of doctors and CRNAs have not been protected, during the settlement process?’ Most people I talk to say ‘Yeah, I/we have seen that.’” A consent-to-settle clause increases your control over your professional reputation.

Trends in 1099 Medical Malpractice Insurance

Choosing malpractice insurance can be daunting enough on its own, but 4 trends are adding a level of complexity to the process.

Inflation-fueled price increases
Malpractice insurance is not immune to the price increases associated with inflation. Culbertson said insurers are not only raising prices for malpractice insurance but also raising prices more frequently. “We are entering a period of higher inflationary expectations,” he said, “so we should expect insurers to continue to raise prices.”

Less medical supervision equals higher premiums
More and more often, CRNAs/nurse anesthesiologists are achieving greater autonomy and being supervised by physicians less often. This presents both opportunities and risks.

As physician supervision recedes for CRNAs, “there are fewer medical entities in the room covered by medical malpractice,” Culbertson explained. “In my experience as a malpractice underwriter, the plaintiffs’ bar, when given a choice, would prefer to pursue doctors more frequently than nurses. But if there’s no one else to sue, they’ll sue the CRNA/nurse anesthesiologist. That will tend to increase the premiums for us.”

Insurers dictating practice guidelines
It’s becoming more common, Culbertson said, for insurers to attempt to influence how CRNAs/nurse anesthesiologists deliver patient care. This is likely an attempt to manage risk and control costs, but Culbertson has a warning for all CRNAs/nurse anesthesiologists.

“Watch out for situations where you’re agreeing to things that might feel uncomfortable,” he said. “The practice has worked very hard to come up with rules and codes of conduct which
you’re held to.” Pay close attention to insurers who require you to adhere to the insurer’s practice guidelines. “You don’t need an additional set of rules that are formulated by an insurance company,” Culbertson said.

The Rise of Moonlighting policies
Moonlighting policies are designed for CRNAs/nurse anesthesiologists who are just beginning to consider 1099 practice, supplementing their W-2 employment. These policies can be more difficult to find in the market because they typically have lower premiums, Culbertson said. “Many insurers prefer full-time coverage because the premiums are much higher,” he said.

Moonlighting policies are important because they offer career flexibility and make the transition to 1099 work easier for CRNAs/nurse anesthesiologists. CRNAs/nurse anesthesiologists are increasingly pursuing 1099 work, so the demand for these policies is increasing.

Transitioning from W2 Insurance to 1099 Insurance

When you make the switch from W2 employment to 1099 employment, you’ll have to make a corresponding change in malpractice insurance. The process can be intimidating. Here are a few key things to consider as you shop around for coverage.

  • In W2 work, your employer’s insurer or captive insurer provides malpractice insurance. As a 1099 independent contractor, you have to do it all yourself. It takes time and research to navigate the process. The AANA 1099 CRNA Institute can be a valuable resource as you make the insurance transition.
  • Once you have chosen insurance, Culbertson advises 1099 CRNAs/anesthesiologists to keep a close eye on when you need to renew your coverage. “Before the beginning of your second year of independence, make sure that you’re well underway with the renewal process,” he said. This ensures your coverage doesn’t lapse and keeps your insurance carrier from having a reason to change the terms of your policy.

AANA Insurance Services: Purpose-Built Protection

As a 1099 CRNA/nurse anesthesiologist, securing the right malpractice insurance is essential. AANA Insurance Services offers exclusive coverage designed specifically for you, including pure consent to settle, occurrence-based policies that eliminate the need for tail coverage, and defense costs paid outside of policy limits. With more than 30 years of experience, flexible options for various practice types, and added protections, AANA Insurance Services is the trusted choice for safeguarding your independent practice. Learn more or request a quote at malpracticeinsurance.aana.com.