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What is Physical Therapist Liability Insurance

May 8, 2019 · 7 minutes to read

By the year 2026, the United States Bureau of Labor predicts there will be more than 300,000 Physical Therapists working in the U.S. (April 2018). That represents more than a 28% increase in the Physical Therapy industry over the course of one decade. So if you are considering becoming a Physical Therapist then you may be on your way to a very successful professional future.

In the process of becoming a licensed Physical Therapist, you will learn a lot about treating patients that are managing chronic illness and accidental injuries.  The use of ice/heat, manual manipulation, traction, exercise, and other therapeutic treatments will be the staple of your daily practice.

Most days you will be helping your patients experience relief from pain and progress in their physical healing. However, there is always the chance a day will come when a patient accuses you of making a mistake that causes them harm. In this case, you may find yourself subject extra, unplanned expenses. Do you have money readily available to cover unforeseen costs such as attorney fees, missed work, court costs, and possibly a large lawsuit settlement?

If not, Liability Insurance is what you will need to safeguard yourself and your Physical Therapy practice. Let’s take a look at what Physical Therapy Liability Insurance is and what it will do for you!

General Liability Insurance Physical Therapists

General Liability Insurance is the basis of all varieties of liability insurance. This type of liability coverage is commonly known as “slip and fall” insurance. It is meant to protect you from general claims of Property Damage or Physical (Bodily) Injury that happens in the physical therapy facility where you work.

General Liability claims can be very broad, and the coverage insures against a wide variety of incidents such as:

  • Expenses resulting from a patient’s accidental physical injury occurring at the facility where you work
  • Unintentional damage of someone else’s belongings while at the facility where you work
  • Allegations of slander, libel, assault and battery, and sexual misconduct

Keep in mind, General Liability does not cover you for employee injuries, professional liability, intentional acts, or claims not related to your Physical Therapy job. However, it will payout for other General Liability claims up to the maximum liability limit defined by the policy.

Learn more about Physical Therapist General Liability Insurance.

Professional Liability (Malpractice) Insurance for Physical Therapists

Professional Liability (Malpractice) Insurance is used by health care professionals to protect them from allegations of negligence and incompetence. Many States require Physical Therapists to purchase and maintain Malpractice Insurance before they begin treating patients.

No matter what your State requires, it is always best to secure a Malpractice plan that can help you pay all the bills stemming from a Malpractice lawsuit. Think about it: one unhappy patient can create a storm of financial burdens caused by legal fees, missed work, and potential payouts to the affected person.

Professional Liability (Malpractice) Insurance for Physical Therapists typically can be defined by one of the following classifications:

  • Improper behavior by practitioner (general)
  • Incorrect use of Physical Therapy equipment, manual therapy, therapeutic exercise, or biophysical agent
  • Unsuitable management over the course of patient’s treatment
  • Failure to adequately supervise or monitor a patient’s care
  • Created a poor environment of care
  • Failure to properly treat a patient

Important Details about Liability Insurance

Purchasing proper Liability Insurance is as important to Physical Therapists as education and licensing. It is vital whether you are a clinic owner, working for a hospital or rehabilitation center. Purchasing your own Liability Insurance will guarantee you have enough coverage to protect yourself no matter the circumstances.

Even if you are currently covered under your employer’s General and Malpractice Liability Insurance plans, the liability limits for employees is normally low and there are typically limitations on what the employer policies will cover. Plus, an employer plan is not portable so if you take a second job, volunteer your services, or resign from your current employer, you will be without coverage and exposed to risk.

To get a better understanding of what you are buying, please take a look at all the basic features of Liability Insurance.

What Are Liability Limits?

All insurance has defined limits of liability which is the maximum amount of money the insurance company will pay for your claim. There are two different liability limits included in each Liability policy: aggregate and per occurrence.

  • Aggregate Liability Limits: The total cost of all claims filed under your liability insurance is the aggregate. The aggregate liability limit is the maximum amount of money the insurance company will pay for all claims. You will be responsible for any costs that exceed the liability limit.
  • Per Occurrence Liability Limits: Each time you file a claim against your liability insurance this limit is the maximum amount the insurance company will pay for that specific claim. Any costs that surpass the liability limit will be your responsibility.

Claims-Made vs. Occurrence Policies

Before accepting your new liability insurance plan, be sure you understand whether your policy is written as a Claims-Made or Occurrence policy.

  • A Claims-Made policy covers you only for claims filed while your liability coverage remains effective. Any liability lawsuits filed outside of the policy term will NOT be covered.
  • An Occurrence policy allows you to file a claim even if the policy is no longer active. As long as the liability coverage was in force during the time of the alleged wrongdoing, the insurance carrier will handle your claim as if the policy were still effective today.

Recommended reading: Occurrence vs Claims-Made Policies

Deductibles

General Liability Insurance does not usually have a deductible amount that needs to be met. On the other hand, Professional (Malpractice) Liability Insurance usually has a $1,000 deductible amount. The deductible works the same as your auto and health insurance.

If you have a Malpractice claim, then you will need to first meet your deductible amount. If your Liability Insurance has a “per claim deductible” it will require you to meet the deductible for each claim filed. This is critical to know especially if one event results in multiple lawsuits or numerous plaintiffs. In that sort of situation, you would pay one deductible for each plaintiff suing you.

Be sure to read through your Liability Insurance plans before purchasing so you understand your particular coverage amounts. Remember, any costs that go beyond what the policy covers will become your personal responsibility. So you want to be sure you have the maximum coverage possible.

How Much Does Liability Insurance Cost?

To make life a lot easier, it is recommended you purchase a Miscellaneous Medical Liability package which includes Malpractice and General Liability Insurance, as well as Cyber Liability Insurance. In this case, you’ll have all the necessary insurance in place while only managing one premium and one policy.

Liability Insurance premiums vary depending on each insured’s unique information. The geographic location, years of professional experience, the industry’s level of risk, and many other factors will influence your final premium amount. However, you can bet the cost will be a lot less than paying out-of-pocket for a Malpractice or General Liability lawsuit.

On average, Liability Insurance for one Physical Therapist may cost around $600 per year. As you can see from these examples, premium amounts break down to as little as $1.64 per day. That’s a very low cost for protection with $1 Million dollars limit!

Conclusion

Assisting patients in achieving their optimum physical fitness level is what gets you out of bed each morning. Having General Liability and Professional (Malpractice) Insurance will ensure you sleep peacefully each night. Hopefully, you will never have to use the coverage but knowing it is available to you just in case is an investment you will not regret.

You’ve already spent thousands of dollars and hundreds of hours becoming a licensed Physical Therapist, so what’s a few dollars per day to protect yourself from liability lawsuits?

Find out more about Physical Therapist Liability Insurance options and pricing.


Reference List:
U.S. Bureau of Labor Statistics (April 13, 2018), [Online] Available from: https://www.bls.gov/ooh/healthcare/physical-therapists.htm

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