How would malpractice insurance premiums and legal liability change without nursing licenses?
Executive summary
Removing nursing licenses would likely shift—but not eliminate—malpractice risk, change who purchases and pays premiums, and alter incentives that currently lower insurers’ rates for licensed practice; current industry sources say typical nurse malpractice premiums run roughly $68–$200/year or about $542/year on average, depending on role, location and scope of practice [1] [2]. Available sources do not model a world without licensure; they explain how licenses, employer coverage, scope of practice and workplace risk factors now shape premiums and liability [3] [4].
1. Why licenses matter to insurers: the underwriting framework
Insurance companies and trade guides price nurse professional liability by assessing scope of practice, exposure to high‑risk settings, claims history and regulatory obligations—factors that hinge on licensure and defined scopes of practice; premiums vary by role and specialty because insurers see different statistical risk in ER/ICU versus school nursing [1] [2]. Licensing creates a predictable legal standard and regulatory process (boards, complaints, discipline) that insurers and employers factor into underwriting and defense strategies [3].
2. Direct effect on premiums: more uncertainty, likely higher costs for some
If licensure disappeared, insurers would face greater uncertainty about who is qualified to perform which tasks and which standards apply; insurers price uncertainty and systemic risk into premiums, so some categories of formerly licensed nurses—especially those working in high‑liability areas—would likely see higher individual or institutional premiums. Current published premium ranges for nurses ($68–$200/year for many roles; average ~$542/year across nurses in one market) show how sensitive pricing is to role and geography today [1] [2].
3. Who would buy insurance and who would pay? Employers vs. individuals
Under current law employers commonly carry vicarious‑liability coverage because of respondeat superior; nurses still buy personal policies to protect against gaps and license defense costs [3]. Without licensure, employers would likely still need liability insurance for care they supervise, and private insurers might push more cost onto employers through higher group policy premiums or stricter contractual indemnities—trade and broker sites advise that employer policies can leave individual gaps and that nurses often purchase supplemental coverage [3] [5].
4. Legal liability shifts: tort law rather than regulatory discipline
Presently, licensure enables regulatory discipline (boards can suspend licenses); malpractice claims proceed in tort alongside potential licensing actions [3]. If boards vanish, the primary accountability mechanism would be civil litigation and contractual remedies; sources note malpractice insurance covers attorney fees and settlements in lawsuits, and insurers would therefore remain central to funding liability even without regulatory license actions [2] [6]. Available sources do not provide empirical estimates for changes in lawsuit frequency absent licensure.
5. Market responses: credentialing, private certifications, and contracts
Insurers and health systems could shift toward private credentialing, stricter employment contracts, and requirements for third‑party certifications to recreate the confidence that public licensure affords; brokers and insurer guides already stress the role of credentials and contracts in coverage decisions today [4] [7]. Industry offerings that now advertise low premiums for employed RNs or tailored NP policies show insurers are willing to differentiate risk by documented qualifications—an approach they could expand if public licenses disappeared [5] [8].
6. Patient signaling and malpractice dynamics
Licenses serve as a public signal of minimum competency; without them patients and facilities would rely more on private proof (certificates, employer vetting) and liability insurance as a backstop. Sources emphasize that malpractice insurance also reassures patients and contracting entities about accountability, and insurers sometimes require specific credentials or limits to underwrite coverage [9] [6]. Available sources do not report whether removing licenses would reduce or increase malpractice claims overall.
7. Practical limitations in the current reporting and open questions
Existing sources explain how premiums are calculated, typical price ranges, and the role of employer coverage and licensing boards, but none model or quantify the effects of abolishing nursing licensure—so claims about exact premium increases, litigation frequency shifts, or the viability of substitute credentialing are not supported in current reporting [1] [3] [2]. Any firm projection would require new empirical modeling that current trade and insurer materials do not provide.
Bottom line: insurers would adapt, and costs would likely reallocate
Trade and insurer materials indicate malpractice insurance would remain central even without licenses; greater uncertainty around qualifications and standards would probably raise premiums for higher‑risk roles and shift more contractual and insurance burdens to employers and private credentialers, but precise magnitude and litigation impacts are not addressed in the available sources [1] [3] [4].