Is Professional Liability Insurance Worth it?

You’ve got health insurance, dental insurance, vision insurance, auto insurance, home insurance, life insurance—and if those weren’t enough, if you’re a practice owner or an independent contractor, you probably have professional liability insurance, too. But what if you’re a PT or PTA on staff at a clinic, hospital, or rehab center? Do you need your own liability insurance policy? According to Jonathan Bassett, author of a previously published ADVANCE article, it all “depends on whom you ask.”

For the article, Bassett sat down with two experts—Ron Scott, JD, MS, PT, OCS, an associate professor and chair of the physical therapy department at Lebanon Valley College in Annville, Pennsylvania, and Debra Daniels, MBA, MHA, director of quality and risk services at SSM Rehab, a 100-year-old not-for-profit rehab hospital in St. Louis. While Daniels thinks purchasing individual liability insurance may do more harm than good, Dr. Scott believes it could afford PTs much-needed peace of mind.

Before we jump into what the experts have to say on the topic, though, I just have to make one thing clear. Nothing in this post is meant to be advice—legal or otherwise—except this: If you have any questions regarding your specific insurance situation, speak with your attorney.

Reasons to Consider Professional Liability Insurance

Dr. Scott doesn’t give any specific instructions regarding insurance—because that would constitute legal advice—but he does feel that therapists in “all practice settings would benefit from the economic and emotional peace of mind that comes from carrying personal liability insurance.” He goes on to say that “while lawsuits against physical therapists are rare, they can and do happen”—and, if you are ever in that type of a situation, having adequate protection can be a big help.

“In a perfect world, an employer’s insurance would cover an employee 100% of the time,” Dr. Scott says. “The problem is that clinical practice does not always work that way.” In his experience, Dr. Scott has seen many instances of employee and employer “in a rally of finger-pointing” and blame-transferring, which is why carrying your own liability coverage can be really beneficial. According to Dr. Scott, it “can help defray the cost of legal representation...and provide a sense of comfort in a frightening and confusing time.”

In another ADVANCE article, author Mike Le Postollec writes that “legal fees to defend against a malpractice suit could be as high as $500 per hour, and with professional reputations and personal aspects at stake, adequate coverage is key.” Now, he’s talking specifically to PTAs about their liability coverage, but my guess is his stance would be the same for full-fledged therapists.

The Myth of Increased Litigation Risk

There’s a pervasive myth circulating through the healthcare community that providers who carry their own professional liability insurance are sued more often than those who don’t. In Bassett’s article, for example, Daniels asserts that physical therapists who carry their own liability insurance may actually attract litigation and lead “plaintiff attorneys to be more aggressive.” She goes on to say that she has been involved in several lawsuits, and all of the defendants were dismissed except for those who carried individual insurance. She does recommend, though, that therapists who work in small practices make sure they know how much insurance the clinic carries.

While it’s tempting to conclude that there’s a direct relationship between a defendant’s involvement in a lawsuit and that defendant’s possession of individual liability insurance, there’s no clear evidence to support this connection. In Bassett’s case, her observations may be coincidental. 

To help debunk this myth, healthcare writer Robyn Correll, MPH, CHWI, spoke with Richard Mermelstein, a New York-based malpractice attorney and partner at Wilson Elser, LLP. According to Mermelstein, having your own malpractice insurance does not make you more of a target for litigation. “You are not more likely to get sued if you have your own policy,” he says. “Whether you’re covered or not isn’t a matter of public record.” Mermelstein also notes that a professional’s name is often one of several listed in the suit. “A plaintiff can always remove you from the claim once they’ve reviewed everyone’s insurance information, but having your own insurance won’t keep you from being named in the first place—and not having your own policy is not a guarantee you’ll be dropped from the suit.”

So, what would happen if a lawsuit were brought against an employee who did not have individual liability insurance? According to Daniels, it is the employer’s responsibility to cover an employee’s actions “under the statute of vicarious liability.” As long as you are an agent of the organization, that organization must assume responsibility for your actions—negligent or not. However, as Mermelstein points out, it’s important to keep in mind that “your employer chooses the policy, not you.” This means that the insurance your employer provides for you might not include certain things that you’d like to have covered, such as violations of the Health Insurance Portability and Accountability Act (HIPAA).

It also means that there could be strict limitations as to when your employer’s policy will and will not cover you. (This is particularly important to consider if you moonlight as an independent contractor; your employer’s insurance carrier might not defend you if you’re named in a lawsuit as a result of this work.) And, perhaps most importantly, this could mean that your employer would ultimately decide whether to settle your case or go to trial—not you. Mermelstein explains that “some policies include a ‘consent clause’ (sometimes referred to as a ‘consent-to-settle’ clause) that gives you the right to overrule certain aspects of your defense if you don’t agree with them.” That said, this clause isn’t always included in employer-provided policies. So, as with anything else, be sure to do your homework and find out exactly what your employer’s policy does include—and what it does not. “If you’re covered under your employer’s malpractice insurance, request a copy of the policy,” Correll advises. “Read it carefully to verify that you feel covered and you’re comfortable with the amount of control you’d have over your defense in the event of a claim.” 

Next Steps

Obviously, there are two sides to this much-debated coin but, as Daniels says, it’s ultimately a personal decision. That said, Mermelstein, Daniels, and Dr. Scott do encourage therapists to speak with their personal attorneys or an unbiased consultant—someone who understands the specifics of physical therapist liability and, as Dr. Scott says, “the differences between occurrence, claims-made, and tail coverage”—before taking any action.

If you do decide to get your own professional liability insurance, your next step is choosing an insurance provider.

If you’re an APTA Member and you decide you want to carry your own liability insurance, you are eligible for a professional liability insurance policy through Healthcare Providers Service Organization, underwritten by the American Casualty Company of Reading, Pennsylvania. According to the APTA, this policy is designed to meet the needs of today’s practicing PTs, PTAs, and physical therapy students. It offers 24-hour protection (on or off the job), with coverage limits of up to $1 million per claim and up to $3 million annual aggregate. The policy also includes license protection coverage and full payment of covered legal costs. To learn more, check out this APTA page. 

Whether you’re an APTA member or not, we also highly recommend Berxi, which is a division of Berkshire Hathaway Specialty Insurance. Berxi offers affordable medical malpractice insurance for both individual physical therapists and physical therapy businesses. Customers can choose between claims-made and occurrence policy options and can select limits of liability based on their particular needs. Part of what makes Berxi a popular choice among physical therapists is that the company sells directly to customers, rather than through brokers. This means that therapists who buy policies with Berxi could end up saving as much as 20% on their annual insurance premiums. Plus, Berxi’s digital platform makes it incredibly easy to get a quick quote, buy a policy, and download a certificate of insurance—all in the same day if you need to. If you ever have to file a claim, you can do that online, too. Learn more about how Berxi can help you grow and protect your career.

How do you feel about professional liability insurance? Is it worth it? Tell us your opinion in the comments section below.