Moonlighting is common among medical residents who often earn low pay but have expensive school loans. An estimated 30% to 40% of residents across all specialties moonlight during training, while some practicing doctors work more than one job for extra income, or to gain outside experience.
While moonlighting offers additional earnings, it also comes with increased risks. One of the biggest is a potential malpractice insurance coverage gap.
This gap exists because providers often don’t realize that malpractice insurance provided by a primary employer usually doesn’t follow them to moonlighting work, and that they aren’t always covered by the insurer of the facility where they’re working their side gig.
Before moonlighting, providers in all phases of their careers must ensure they have the correct medical malpractice insurance coverage in place. This guide explains the details.
Moonlighting involves working additional shifts outside of your primary job. It can occur in any field. In the medical field, it can be broadly grouped into two types:
Moonlighting is sometimes restricted by the rules of your residency program or by your employment contract. Always confirm you have the right to moonlight before you move forward.
The term moonlighting is sometimes used interchangeably with the term locum tenens, but they aren’t the same.
The table below summarizes key differences between the two types of work.
Moonlighting takes many forms, but some common scenarios where medical professionals find side work include the following:
There are others as well, including serving as a surgical assistant or working in a medical spa. Each of these different scenarios presents its own risks for malpractice coverage.
Physicians employed by hospitals, health systems, and large group practices are typically covered by an employer’s malpractice insurance policy for their primary job. The employer may select the carrier, coverage limits, and other policy terms, and the employer pays for or subsidizes premiums.
Medical malpractice insurance provided by an employer typically limits coverage to services performed on behalf of the employer, and it usually does not extend to secondary employment. A cardiologist working for a major medical group would be covered for services performed for that group but not for services provided separately in an ER on evenings or weekends.
Even if your policy has more flexibility than most, it typically still has exclusions, such as restricting coverage for outside employment or independent contractor status, with those limits often appearing in employment contracts or policy terms for outside work.
You must verify whether you have coverage in place before moonlighting. If you don’t confirm you’re protected, you face legal defense costs, as well as the potential for a large settlement or judgment. Your personal assets are at risk, and you could also be subject to an investigation and board action for not having the required coverage in place when practicing medicine. Before assuming moonlighting is allowed or insured, review your employment agreements and any employee handbook rules.
To verify coverage:
Ultimately, the responsibility for protecting your assets lies with you.
If a moonlighting provider’s insurance through a primary job doesn’t provide medical malpractice coverage, there are two possible ways to get malpractice coverage for the side work. Options include the following.
The same large hospitals and health systems that cover full-time employees may also cover part-time workers who are moonlighting for them, including when you take a part-time job or another secondary job with the same employer.
Providers can try to negotiate for coverage when applying for a moonlighting position and should read their employment contract carefully to determine if they’re covered for all services they’re performing, whether there are exclusions or limitations, and whether the arrangement raises conflicts of interest or overlaps with direct competitors.
If you are not covered by either your primary employer or the company you’re moonlighting for, you must secure your own individual policy from a malpractice insurance company before working with patients. Otherwise, you face the risk of substantial legal liability that puts your personal assets at risk.
When purchasing your own policy, make sure it is comprehensive, covers the type of work you are performing, and will leave you with no coverage gaps. One of the key factors to consider is whether you want a claims-made vs. occurrence policy.
Compare coverage, prices, and terms for both policies to select the best one for your needs.
When you’re employed as a moonlighter and want to know if the company you’re moonlighting for will cover you, it’s helpful to determine if you’ve been hired as an independent contractor or an employee, since that status can affect not just coverage but broader legal considerations.
If you're an employee, the odds are significantly higher that you will have malpractice coverage as part of your employment package. You still must confirm this.
If you're classified as an independent contractor, you’re likely to be responsible for obtaining your own malpractice insurance unless the contract specifically states otherwise, and it should clearly define duties so outside work does not interfere with primary job responsibilities.
Malpractice insurance policies often include limitations and restrictions on coverage.
When your moonlighting work falls outside the scope of the policy, includes excluded work, or creates potential conflicts with your regular role, you will not be covered for it.
Common reasons for coverage gaps based on policy language include:
An expired claims-made policy also creates a coverage gap without tail coverage. Reading the policy language carefully helps you determine if these gaps exist and if you need additional insurance protection.
You may need to purchase an individual insurance policy that covers moonlighting if:
Some physicians also take on extra shifts for additional income when rising costs or unexpected expenses strain their regular budget. Holding multiple jobs can increase burnout risk and may lead to reduced productivity or weaker job performance.
If you have no coverage for your moonlighting work, purchase a policy before you begin taking on shifts outside your regular job.
You may not want to purchase moonlighting insurance if:
You also must confirm that the decision accounts for whether moonlighting could create conflicts with your primary employment obligations. You also must confirm that the cost of buying individual coverage does not exceed the amount you earn by moonlighting. If it does, pursue another opportunity where your employer will provide insurance.
Still need to know more? Here are the answers to frequently asked questions about moonlighting.
You may need separate malpractice insurance to moonlight. If you have malpractice insurance through your primary job, that coverage typically is tied to your employed work and usually will not follow you into a side business or other outside clinical work. However, the employer you’re moonlighting for may provide coverage, so review their policies and the terms of your employment carefully. Moonlighting can be lawful only if it complies with your contract and employer rules.
Moonlighting is often not covered by your primary employer’s malpractice policy, and some employers have clear company policies or a formal moonlighting policy that exclude outside work from employer-provided coverage. Many policies have exclusions for outside employment or performing services outside of the regular scope of your work.
You may be covered by the company you’re moonlighting for, but that depends on many factors, including the terms of employment. Some employers prohibit moonlighting altogether under their internal rules.
Moonlighting isn’t the same as locum tenens. Moonlighting means you have a primary job and are picking up extra shifts on the side when possible. Locum tenens means that a series of temporary assignments (some lasting longer than others) are your full-time job.
When entering into a moonlighting contract, consider whether the arrangement could create conflicts of interest or be viewed as unethical if it conflicts with your primary employer’s company interests, then review:
The goal is to ensure you’re fully covered for work performed while moonlighting so you don’t put your finances at risk. If disclosures are required, use open communication with both employers to address moonlighting issues early.
You cannot afford to make a mistake and assume that malpractice insurance covers you when moonlighting if it doesn’t. You face high legal costs and personal liability if a problem arises. Using company resources for outside work can also create coverage and employment problems. The same applies if you use company equipment for a second job.
If you wish to buy your own malpractice coverage to secure the necessary protection for your assets, you should look for:
Moonlighting is generally permissible only if it complies with your policy terms, contract, and applicable rules. Connect with Indigo to find malpractice coverage that meets your needs.
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