Physical Therapy Liability Insurance: What You Need to Know

Physical Therapy Liability Insurance: Here's What You Need to Know

Among medical practices, physical therapy ranks as the top medical field that had closed malpractice claims in 2011, 2016, and 2020. A malpractice lawsuit against you as a physical therapist can cost you a significant sum. The Healthcare Providers Service Organization (HPSO) found in its 2020 report that the costs to physical therapists of malpractice lawsuits reached $134,761. This represented an increase of 12% over four years between 2016 and 2020. Without physical therapy liability insurance, you could face paying out these costs yourself. Protect yourself and your practice from the high legal costs and time required of lawsuits by investing in malpractice insurance.

What Is Liability in Physical Therapy?

Liability for physical therapists refers to the legal requirement for providers to offer patients quality, effective, and safe care. If you face a malpractice suit, the claimant asserts that you caused harm to a patient through negligence.

To prove negligence, malpractice lawsuits must show evidence of the following:

• Violates standard of care: The physical therapist failed to meet the standard of care.
• Caused harm: Failing to meet the standards of care by the physical therapist directly caused the harm the patient experienced.
• Serious harm occurred: The patient experienced serious harm from physical pain, suffering, past and future medical bills, disability, or income loss.

While a lawsuit must have the above parts to be successful in court, patients may sue without fulfilling all the requirements. Some patients may experience harm that they cannot directly connect to the physical therapy you provided but may sue you, nonetheless.

• Having professional liability insurance protects you from several types of liabilities, including:
• Negligence: This type of lawsuit alleges that the physical therapist did not give a patient treatment that followed established standards of care for the state.
• Failure to obtain informed consent: The patient did not have complete information about the risks and benefits of treatment before agreeing to it.
• Improper or harmful treatment: The patient received non-evidence-based care or experienced harm from the treatment.

Cost of Professional Liability Insurance for Physical Therapy

Several factors will determine the total amount that you spend on physical therapy liability insurance:

• Your location
• Whether you insure only yourself or the entire clinic
• Clinic size
• Insurance provider
• Coverage type and amounts selected

Since there are multiple components that contribute to the total cost you'll spend on a professional liability insurance policy, the amounts will vary. Commonly, physical therapy liability insurance can cost from hundreds to thousands of dollars annually. However, think about how much more a malpractice lawsuit can cost, and you'll quickly recognize how important having liability insurance is.

Types of Professional Liability Insurance

You'll need to look over how your practice operates to determine the types of coverage you need. The choices you make can determine whether you have protection in a potential malpractice suit. The following are only a handful of the many options for coverage. Speak with your insurance provider to learn more about the company's full range of choices and which are ideal for your practice's liability needs.

Lost Wages Coverage

Lost wages coverage offers you extra payments to make up for the time that you have to spend away from the clinic during your defense. This policy coverage provides you with monetary support when you miss work to be in court or talk with lawyers. You may also see this type of coverage called "loss of earnings" coverage.

HIPAA Coverage

HIPAA guidelines regulate how all medical professions, including physical therapy, handle patient information. Your general professional liability insurance policy may not cover the costs of non-compliance with HIPAA. HIPAA coverage helps to cover these expenses if you have it on your policy.

License Protection Coverage

A malpractice suit could cost you your license. You may need to pay a separate legal fee to help you keep your license during a malpractice suit. This coverage helps pay for those extra costs.

First Aid Coverage

Emergencies can happen in your physical therapy clinic. First aid coverage pays for the sudden expenses of ambulance rides or emergency medical care.

Benefits of Physical Therapy Liability Insurance

Before making up your mind about choosing a professional liability insurance policy, make sure to recognize the benefits that you gain in return for the cost of the plan. The following are some of the perks that you'll enjoy by covering yourself or your practice with a physical therapy liability policy:

1. Legal Protection

If you have insurance, you know that you will be able to get a lawyer to help defend your case. Without coverage, finding a qualified attorney to help you at a rate that you can afford may be difficult.

2. Save Money on Legal Fees

Having liability insurance does not keep you from getting sued. However, it does cover the costs of legal expenses from that lawsuit. According to HPSO, in 2020, costs to defend physical therapists in lawsuits averaged $14,575. But some cases reached a jaw-dropping $300,000 to defend due to their complexities and need for expert advisors.

You already have to worry about denied claims. Why worry about paying legal fees, too? Unless you have tens of thousands of dollars to donate to a defense lawyer, you need professional liability insurance.

3. Peace of Mind for the Physical Therapist

As a physical therapist, the only thing on your mind should be the care of your patients. Worrying about liability or paying for legal defense in a lawsuit can distract you from your real work. Insurance gives you peace of mind.

4. Improved Credibility and Clinic Reputation

Carrying insurance can make you more aware of all your patient documentation. If you keep thorough patient health records to show in case of a malpractice lawsuit, you demonstrate that you have professional reliability and credibility as a physical therapist. Good documents also make the legal process faster and easier and ensure that you correctly communicate with others on the patient's care team.

If purchasing a liability insurance policy prompts you to improve your patient recordkeeping, you establish yourself as a professional in the industry. Quality documentation also gives you a better chance of meeting compliance requirements, which ensures your credibility.

The Bottom Line: Is Professional Liability Insurance Worth It?

Don't let a malpractice lawsuit cost you hundreds of thousands of dollars in legal costs. Research physical therapy liability insurance plans to find the right option for your practice.

While insurance coverage can help your practice save money, you should also actively work to maintain compliance with HIPAA and other requirements. At MWTherapy, we provide you with software solutions built specifically for physical therapy practices. Discover more about our practice management solutions for your physical therapy clinic. Spend less time worrying about maintaining compliance and more of your time helping patients, book a demo of MWTherapy today!