Doctors and Nurses Insurance

What does physician and medical practice insurance cover?

• Professional liability, or medical malpractice, for claims arising from patient care. This is typically the lead coverage.
• Business owners policy for your office, contents, and general operations.
• Cyber liability for patient-data exposure under HIPAA and the California Confidentiality of Medical Information Act (CMIA).
• Workers’ compensation, which California requires once you have any employees.
• Employment practices liability (EPLI) for claims such as harassment, discrimination, or wrongful termination.
• General liability for non-clinical incidents, such as a patient slip-and-fall.
• Business interruption to help replace income if a covered event closes the practice.

Physician practices handle protected health information under HIPAA and CMIA, which raises the importance of cyber and privacy coverage. California has no general malpractice mandate, but Business and Professions Code 2216.2 requires liability security for surgery performed outside a hospital. Hospitals, credentialing bodies and payer contracts require proof of coverage as a condition of the contract.

How we help: we learn how your practice operates, from specialty to staffing to billing, then structure coverage so malpractice, cyber, property, and workers’ comp reinforce one another. We explain the tradeoffs plainly, coordinate the pieces, handle placement, and stay available as your practice grows.

Coverage can follow the practitioner or the practice, and which one applies decides who owns the tail on leaving, a question common across the healthcare fields we serve.

Does California require doctors to carry malpractice insurance?

Not as a general rule, but in one setting it does. Business and Professions Code section 2216.2 makes it unprofessional conduct for a physician to perform surgery outside a general acute care hospital without adequate security by liability insurance or an interindemnity trust. Office-based and outpatient surgery therefore carries a statutory insurance duty, and the statute sets no dollar figure. Everywhere else the requirement is contractual. Hospital medical staff bylaws, health plan contracts and IPA agreements all ask for proof of coverage at limits they choose, so the limits in your own contracts are the ones that matter. Independent nurse practitioners have a separate statutory duty, covered below.

What is the California malpractice cap in 2026, and what did AB 35 change?

The cap in Civil Code section 3333.2 limits noneconomic damages only, so medical costs and lost earnings sit outside it. AB 35 replaced the old $250,000 figure for cases filed from 1 January 2023. Injury cases started at $350,000 and rise by $40,000 each January until they reach $750,000; wrongful death started at $500,000 and rises by $50,000 a year to $1,000,000. For 2026 that puts the caps at $470,000 for injury and $650,000 for wrongful death, and the figure in force at judgment or settlement is the one that applies. The law also created three separate caps: one for providers collectively, one for institutions, and one for unaffiliated defendants responsible for a separate act. A single physician answers to one cap, but a plaintiff can reach three in one case. None of this sets a policy limit. Limits are chosen against economic damages and contract requirements, not against $470,000.

Will a malpractice settlement be reported to the Medical Board?

Yes, above a threshold. Business and Professions Code section 801.01 requires a report of any settlement over $30,000, and of any arbitration award or civil judgment of any amount, in a claim alleging negligence or unauthorized services. The report is due within 30 days of the signed settlement, the served award or the entered judgment. When there is a policy, the insurer files it. A physician without insurance files it personally. That is why the consent-to-settle clause in a policy matters: the report follows the settlement, and a physician who is named in a group settlement is named in the report.

Do nurse practitioners and RNs need their own liability policy in California?

Nurse practitioners practicing under AB 890 do, by statute. A 103 NP under section 2837.103 has completed a transition to practice of three full-time years or 4,600 hours and works in a group setting where at least one physician practices. A 104 NP under section 2837.104 has three further years in good standing and may practice independently. Both sections require professional liability insurance appropriate for the practice setting, and both require the NP to tell new patients that a nurse practitioner is not a physician. We found no licensure requirement for a registered nurse to carry insurance. An employer's policy covers a nurse only while acting within the scope of that employment and defends the employer's interests first. It does not follow the nurse to a per diem shift, a second job, volunteer work, or a Board of Registered Nursing investigation.

What is the difference between claims-made and occurrence coverage, and when do I need tail coverage?

An occurrence policy responds to an incident that happens during the policy period, whenever the claim arrives. A claims-made policy responds only to a claim first made and reported during the policy period, for an incident on or after the retroactive date. When a claims-made policy ends, tail coverage keeps it responding to later claims, and prior acts coverage from a new insurer is the alternative. The tail matters in California because Code of Civil Procedure section 340.5 gives a patient up to three years from the injury, or one year from discovery. A child under six has until the eighth birthday. A physician or NP who leaves a group can be sued years later. Before signing an employment or shareholder agreement, find out whether the group policy is claims-made and who pays for the tail. No California statute requires tail coverage; the contract decides.

What does medical professional liability not cover?

Willful acts, first of all. Insurance Code section 533 bars an insurer from paying for a loss caused by the insured's willful act, so intentional harm is uninsurable by statute. Policies then exclude or sublimit sexual misconduct, criminal acts, billing fraud, fines and penalties, contractual liability, employment claims and cyber events. Two exposures that feel like malpractice are not. A Medical Board or Board of Registered Nursing investigation under section 2234 is a licensing matter, not a damages claim. Defense for it sits in a separate license or regulatory defense coverage part with its own sublimit. A payer, Medicare or Medi-Cal billing audit sits in a billing errors or audit defense part, also sublimited. Ask which parts are on the quote.

What are our HIPAA and California breach duties, and what does cyber insurance pay for?

Two clocks run at once. Under the HIPAA breach rule at 45 CFR 164.404, affected individuals must be notified within 60 calendar days of discovery. Breaches of 500 or more people go to HHS and prominent media at the same time, and smaller breaches are logged and reported within 60 days of year end. HIPAA penalties published in January 2026 run from $145 to $2,190,294 per violation, with a $2,190,294 annual cap. Since 1 January 2026, Civil Code section 1798.82 also requires notice to California residents within 30 calendar days of discovery. When more than 500 residents are notified, a sample notice goes to the Attorney General within 15 days. Licensed clinics and facilities have a further 15-business-day report to the Department of Public Health under Health and Safety Code 1280.15. A private physician office is exempt from clinic licensure, so that rule does not reach it. Under the Confidentiality of Medical Information Act, a patient may recover $1,000 in nominal damages without proving loss. Cyber coverage is built to pay for notification and credit monitoring, forensics, counsel for the HHS and Attorney General notices, ransomware and business interruption, third-party claims, and fines where insurable.

Does a medical practice need workers' compensation in California?

Yes, from the first employee. Labor Code section 3700 requires every employer to secure compensation through an authorized insurer or a certificate of consent to self-insure. Failure brings a stop order and a penalty of $10,000 per employee on the payroll at the time of an injury. Knowing failure is a misdemeanor under section 3700.5 with a fine of at least $10,000. Physician practices and outpatient clinics are rated under WCIRB class 8834, with hospitals under 8833. The exposures are needlestick and sharps injuries, patient handling and slips. Our workers' compensation page covers the policy itself.

What employment claims should a medical office plan for?

Harassment claims apply to every employer. Government Code section 12940 defines an employer as anyone with one or more employees for that purpose. It also holds the employer responsible for harassment by non-employees, including patients, when it knew or should have known and failed to act. Most other Fair Employment and Housing Act claims begin at five employees, which is also the threshold for the two-hour supervisor and one-hour staff harassment training under section 12950.1, repeated every two years. Employment practices liability is the coverage built for wrongful termination, discrimination and harassment claims, with third-party coverage for claims by patients alleging discrimination and, where offered, a wage and hour defense sublimit.

What property, income, spoilage and equipment coverage does a practice need?

Business personal property for exam and imaging equipment, sterilizers, records hardware, furniture and tenant improvements. Equipment breakdown for the mechanical or electrical failure of imaging, lab, sterilization, refrigeration and HVAC units, which a standard property form excludes. Spoilage for vaccines and refrigerated medications. The CDC storage standard is 36 to 46 degrees Fahrenheit for refrigerators with a digital data logger recording at least every 30 minutes, and many spoilage forms require that alarm. Business income and extra expense for a covered loss that closes the office, with a dependent-property extension for the hospital or surgery center where you operate. General liability for a visitor's slip in the waiting room, which is separate from clinical negligence. An umbrella sits over general liability, auto and employer's liability; most umbrellas do not sit over professional liability.

How do you get a medical practice quote from us?

Start a business insurance quote and tell us the specialty and the procedures performed, in particular any surgery outside a hospital. List the physicians, NPs, PAs and RNs with their 103 or 104 status, and the settings and hours for each. Add the current policy type and retroactive date, five years of loss runs and any Board actions, payroll by class, equipment and vaccine inventory values, and the insurance clauses in your hospital and payer contracts. Some practices we can write directly and quickly. Others go to underwriting for approval, or need a wholesale market, and those take longer. Either way you know before you decide.

Statutory figures, cap amounts and penalty schedules current as of September 2026 and specific to California; the HIPAA figures are the January 2026 federal publication. Policy descriptions are general; the form controls.