Understanding Group vs. Solo Med Mal Coverage and Policy Impact by Employment Status
Choosing the right type of medical malpractice insurance coverage requires an understanding of your employment status and practice setting. Whether you’re a W2 employee or a 1099 independent contractor, your role directly influences the type of med mal insurance coverage you need. In this post, we’ll break down the key differences of group vs. solo med mal coverage, why employment status matters, and how to navigate transitions effectively.
Group vs. Solo Med Mal Coverage
Group and solo medical malpractice insurance policies are structured to meet different needs of the first named insured, and understanding their distinctions is essential when picking the right policy for you and your practice.
Group policies are purchased by organizations, such as hospitals or medical practices, to cover their employed providers. These policies:
Typically extend coverage only for work performed on behalf of the group.
Specifically exclude coverage for activities outside the group’s scope, such as moonlighting or working as an independent contractor.
May automatically include W2 employees, though physicians often need to be explicitly named.
While group policies provide convenience for the organization, they limit flexibility for individual providers. If an individual provider leaves the group, they or the group will likely need to purchase tail to protect against claims made after the provider’s departure. By design, control over the coverage extended by a group policy lies with the group. This coverage structure prevents scenarios in which individual providers may let their solo coverage lapse, neglect to purchase tail coverage, and not inform the group of the resulting gaps in coverage for provider and group alike.
Solo policies are purchased by individual healthcare providers to cover their practice, regardless of where or how they work. These policies:
Offer portability, covering you across different jobs or practice settings.
Provide control over policy terms, such as limits and retroactive coverage.
Can avoid the need for tail coverage when transitioning between jobs if structured as a claims-made policy with prior acts coverage.
Solo policies are ideal for healthcare practitioners who value flexibility, work as 1099 contractors, or engage in multiple ventures. This flexibility is not a free pass to skip letting your insurance carrier know any changes to your practice profile, however. One of your duties as an insured is to inform your carrier in a timely manner of information that wasn’t on your original application.
W2 vs. 1099 Med Mal Insurance: Why Employment Status Matters
Your employment status—whether you’re a W2 employee or a 1099 independent contractor—has a significant impact on your med mal coverage requirements.
As a W2 employee, your employer often provides coverage through a group policy. However, this arrangement has limitations for you as a provider:
The policy only covers work performed for the employer.
If you maintain your own solo policy, you may be at risk of double coverage, which is not recommended as it can cause potential claim disputes between insurers. You’ll want to inform the carrier of your solo policy to exclude coverage for any roles in which coverage is provided for you.
As a 1099 contractor, you are typically responsible for securing your own medical malpractice insurance as a rule of thumb. While some employers may add contractors to their group policy, this is not guaranteed and often depends on the employer’s cost-saving strategies.
Carrying your own solo policy ensures:
Consistent coverage across all work settings.
Protection against gaps if an employer fails to provide adequate coverage.
Avoidance of tail coverage when transitioning jobs, depending on policy structure.
If you engage in activities outside your primary employment—such as moonlighting—you’ll need separate coverage to avoid gaps. Should you try to secure an outside role while providing proof of coverage under a group policy, most credentialing departments will recognize that the group policy won’t extend coverage to any external roles. They’ll likely require proof that a standalone policy is in place. Even if proof of coverage under a group does slip through credentialing and you’re permitted to work, there is a massive gap in coverage: the group policy isn’t obligated to respond to claims for work on behalf of another entity.
Why Double Coverage Isn’t Double Protection
It’s a common misconception that having multiple policies for the same activity provides extra security and more funds for defense or indemnity in the event of claim. In reality, double coverage often creates complications:
Insurers may play “hot potato” and dispute their responsibility to defend a claim if another carrier might provide coverage, delaying resolution of that claim.
Policies may include clauses that nullify coverage if another policy applies, rendering that policy useless and your premium dollars wasted.
To avoid these issues, consolidate your coverage under a single, comprehensive policy that meets all your needs.
Transitioning Med Mal Insurance Policies
Changing jobs or shifting between W2 and 1099 roles can complicate your med mal insurance. Here are some tips to navigate these transitions smoothly:
Assess Your Coverage Needs
Review your current policy to determine its scope and limitations.
Consider whether your new role requires additional or standalone coverage.
Avoid Coverage Gaps
Ensure continuous coverage during job transitions. For claims-made policies, maintain retroactive coverage or purchase tail coverage as needed.
Inform your insurer of any material changes to your practice profile.
Coordinate with Your Employer
If joining a group, confirm whether you’ll be added to their policy and understand the terms.
For 1099 roles, clarify whether the group offers any coverage or if you’ll need to secure your own.
If the employer offers coverage, discuss who will pay for tail should you leave the group as part of your contract negotiations.
Consult L&J
Work with us to evaluate your options. We can help you tailor coverage based on your employment status, practice setting, and risk profile.
Final Thoughts
Choosing the right medical malpractice insurance requires a clear understanding of your employment status and practice setting. Whether you’re a W2 employee covered under a group policy or a 1099 contractor with a solo policy, aligning your coverage with your professional needs is critical to mitigating risk.
For healthcare professionals navigating job transitions or evaluating coverage options, taking a proactive approach is key. Assess your needs, consult L&J, and ensure your policy adapts to your evolving career.