Reducing legal risks in retirement

Retirement. The word conjures up an image of relaxation and a leisurely lifestyle. But for many nursing professionals, the picture is one of a life nearly as busy as when they were working full-time. Many retirees choose to volunteer, whether it’s responding to disasters, working at a pop-up clinic in an underserved area, answering questions for members of the community, or something else. 

When engaging in these type of post-retirement activities, nursing professionals can easily forget that they still need legal protection for their actions. However, if you have a nursing license, you need both professional liability and license protection insurance coverage. That’s also the case if you are working part-time or per diem, for example, teaching a course or two at the local community college, as you transition to retirement. And it’s the case if you are summoned to give a deposition as a witness- even if you did not provide direct patient care. 

Liability and license protection coverage

Professional liability insurance is needed for protection in the event you are accused of malpractice. Even those who routinely adhere to best practices can make a mistake that results in patient harm or find themselves named in a lawsuit. In addition, even if you are cleared of any liability in a legal case, you will still incur legal fees; professional liability insurance will help cover those costs. 

There are two types of liability insurance coverage: occurrence and claims-made. Occurrence policies are usually preferred because they provide greater coverage: If the incident occurred while the policy was in force, coverage is available even if the policy has expired or been canceled. With claims-made policies, coverage is only available for claims that occurred and are reported while the policy is in force. 

License protection coverage is also needed as part of professional liability insurance coverage so you have the resources to protect yourself against actions related to a state board of nursing (BON) investigation. For instance, if you are investigated for a complaint related to something you posted on social media, license protection coverage will help pay for legal representation during the investigative process. Nursing professionals should know that a BON disciplinary action in one state can also lead to BON action in other states where they hold a license, referred to as reciprocal enforcement. According to nurse attorney Edith Brous, you can be at risk for discipline even if your license is not current. That’s because licenses in some jurisdictions are issued for the lifetime of the licensee. In addition, nursing professionals can be disciplined by agencies other than the BON, such as a state health department. These risks make it critical that you have appropriate insurance coverage.

Weighing options

Some states offer different types of licenses based on practice. For example, Maryland offers the option of a “volunteer” license for those who are practicing nursing but not receiving compensation (for example, volunteering at a community center). The volunteer in this case is still subject to the state-required criminal background check. Another option is “inactive” status, which means the individual cannot practice nursing with or without compensation. Check your state BON for similar options.

As you change the type of practice activities you are involved in, you will want to ensure you have the necessary education to qualify you for completing any tasks. It is also a good idea to discuss your licensure status and insurance coverage with your insurer to ensure you have adequate coverage and are taking advantage of any discounts that may be available. 

Cutting ties

At some point, you may decide that you will not be providing nursing care in any capacity and choose not to renew your license. In this case, notify the BON of your decision; you likely will need to complete a form and pay a fee to convert to inactive status. It is best to complete this process rather than simply let your license lapse, because it makes it easier to reactivate your license should your situation change.

Be aware that you still must address insurance coverage if you have a claims-made policy. You will need to obtain “tail” coverage, which protects you against legal action related to your practice before you dropped your license.

Peace of mind

Retirement should result in less, not more, stress in your life. If you retain your license after retiring, be sure to continue liability and license protection coverage to reduce the financial damage and emotional upheaval associated with litigation. With that peace of mind, you will be ready to enjoy life in retirement.

Getting ready to retire
Retirement involves more than licensure status. Here’s a checklist for nursing professionals getting ready to retire.

Licensure and certification
plans for continued licensure and certification with corresponding board of nursing and certification organization information
cross-training for proposed position changes and transitions
attendance at employer-based training programs (e.g., basic life support).

a signed durable power of attorney for healthcare, living will, and financial power of attorney
a will or living revocable trust
professional liability insurance coverage that includes coverage for incidents before retirement

an appointment with your facility’s human resources team to learn all you can about retirement savings plans and options, post-retirement health coverage, and post-retirement insurance benefits (life insurance, disability, professional liability)
an appointment with a professional certified independent financial planner
a carefully crafted month-by-month savings plan and budget based on retirement goals and options
emergency savings that could cover your financial needs for up to 8 months
insurance (such as long-term care, disability, health, term life, home, auto, professional liability)

Personal and lifestyle considerations
an appointment with your facility’s human resources representative or nursing manager to learn all you can about position and hourly change options
a daily exercise and nutrition routine
an appointment with your employee health nurse to discuss needed titer levels or immunizations (updated TB screening, tetanus, hepatitis)
obtain and secure all your immunization records, for future reference, in case these are needed for volunteer, consultant, or part-time work.

By Cynthia Saver, MS, RN, President, CLS Development, Columbia, Maryland.

Brous E. The BON discipline cascade. Am Nurs Today. 2019;14(11):26-28.
Evans J, Tabloski P. Redefining Retirement for Nurses: Finding Meaning After Retirement. Indianapolis, IN: Sigma Theta Tau International; 2017.
Maryland Board of Nursing. FAQ – Inactive versus volunteer status. 2016.
NSO. Claims made vs. occurrence coverage.
Smith LS. Deciding if and when to retire. Nursing. 2019;46(8):45-49.

Disclaimer:The information offered within this article reflects general principles only and does not constitute legal advice by Nurses Service Organization (NSO) or establish appropriate or acceptable standards of professional conduct. Readers should consult with an attorney if they have specific concerns. Neither Affinity Insurance Services, Inc. nor NSO assumes any liability for how this information is applied in practice or for the accuracy of this information. Please note that Internet hyperlinks cited herein are active as of the date of publication but may be subject to change or discontinuation

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Frequently Asked Questions

You have questions. We have answers. (It's why we're here.)

What kinds of activities might trigger a disciplinary action by a licensing board or regulatory agency? 

The fact is anyone can file a complaint against you with the state board for any reason—even your own employer—and it doesn’t have to be solely connected to your professional duties. All complaints need to be taken seriously, no matter how trivial or unfounded they may appear. 

How does a shared limit policy work?

A shared limit policy is issued in the name of your professional business or company. The policy provides professional liability insurance coverage for the business entity named on the certificate of insurance and any of the employees of the business entity, provided they are a ratable profession within our program. Coverage is also provided for locum tenens professionals with whom the business entity has contracted for services the locum tenens performs for the business entity.

The business, and all eligible employees and sub-contractors you regularly employ, will be considered when determining your practice’s premium calculation and share the same coverage limits you select for the business.

We have a shared limit policy. Are employees covered if they practice outside our office?

The policy covers your employees outside the office as long as they are performing covered professional services on behalf of your business.

If your employees are moonlighting, either for pay or as a volunteer, they should carry an individual professional liability insurance policy to cover those services. Otherwise, they might not be covered for claims that arise out of these activities.

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