As a physical therapy professional, you’ve acquired years of education and training. You’ve kept up with continuing education and are active within your professional community. And you work hard to maintain positive relationships with all your patients. Basically, you’re doing all the right things. But even you, an A-plus therapist and business owner, can be the target of complaints and lawsuits claiming malpractice.
As a lawyer who’s worked with insurance carriers for more than 15 years, I’ve witnessed the importance of having medical malpractice insurance—a.k.a. professional liability insurance—to protect you and your business from financial disaster. But making the decision on what coverages you need, how much to buy, and who to buy it from can be confusing and time-consuming. In this post, I’ll go over the basics of why having your own medical malpractice insurance coverage can be critical—and how to approach the buying decision knowledgeably.
1. What does medical malpractice insurance cover?
First, let me take a step back and explain what malpractice actually is. When someone files a malpractice claim against you as a physical therapist, that person is claiming that:
- they expected you to provide a certain standard of care based on your training and expertise;
- you didn’t meet that standard when performing your physical therapy services; and
- they were injured as a result.
Similarly, a patient or a co-worker could complain to your licensing board regarding your professional conduct or other related issues. Even if the claims made against you are false, you’ll still want to have legal representation to defend you, your career, and your professional reputation.
A good policy will cover attorney and investigation costs as well as damages.
Medical malpractice insurance will ensure that you can get that legal counsel—and more. A good policy can protect you by hiring an attorney for you, investigating the claim, and helping you resolve the matter in a way that defends your best interests. The insurance policy directly covers those attorney and investigation costs—generally at no out-of-pocket expense to you. If you ever had to pay the claimant damages—whether after trial or in a settlement—your professional liability policy would pay for those costs too (up to the limit of insurance you purchased). The average PT claim can lead to tens of thousands of dollars in expenses, so even if you were not found liable, having this coverage in place can provide you with financial peace of mind.
A robust policy may cover costs associated with HIPAA investigations or lost wages.
Robust medical malpractice insurance often provides additional coverage benefits. For example, the insurer may defend you in an investigation of potential HIPAA violations or reimburse you for your lost wages if you must attend a deposition in your own defense.
To summarize, a good malpractice insurance policy should cover:
- Attorney fees and investigation costs to defend against a lawsuit;
- Attorney fees to defend against a board or licensing investigation;
- Reimbursement of defense for HIPAA investigations; and
- The cost to pay damages to a claimant in a settlement or after a judgment is made against you.
2. If I already have malpractice insurance through my employer, should I consider buying my own policy?
If you work at a physical therapy practice, you’ll likely have some coverage under your employer’s policy, which is a great benefit. However, many healthcare professionals find a lot of value in having their own malpractice insurance (i.e., supplemental insurance) on top of their employers’ policies.
- Your policy will defend you in the event of a board or licensing investigation into your professional conduct. Your employer’s policy generally will not.
- Your policy can provide additional limits of insurance that are reserved just for you, which can be helpful in the event that a very serious claim involves damages in excess of your employer’s limits. It also means that you have the right to your own independent defense attorney. This is beneficial if your defense is in any way different from your employer’s. In such cases, it’s important to have independent legal representation that’s dedicated to protecting your best interests.
- If you practice as an independent contractor (even on a part-time basis), your employer’s policy will not cover you for those activities. You’ll need to have your own primary malpractice insurance policy to ensure that your independent practice has the protection it needs. (If you’re the business owner, it’s wise to advise your therapists to purchase supplemental policies, which could cost them as little as $150 a year.)
3. What are the “must-have” coverages versus the “nice-to-have” coverages?
The coverage benefits I outlined above are typically considered “must-haves” when it comes to your professional liability insurance. However, there are many additional coverages that are also valuable, so you should keep your eye out for these “nice-to-have” features:
- Reimbursement for your lost wages and expenses when you must attend court proceedings in your defense;
- Insurance coverage that follows your license wherever you’re allowed to practice;
- Coverage for physical therapy services delivered through telemedicine or telehealth (sometimes at no additional charge);
- Reputation protection (this is a built-in ability to hire a PR firm to protect your professional reputation if a claim threatens it);
- The ability to write multiple professionals in your practice on a “group” basis (rather than buying individual policies separately); and
- Optional coverages like general liability for your office or clinic.
4. How do I choose a good insurance carrier?
There are a lot of insurance companies out there that offer medical malpractice products, and there’s no shortage of associations and insurance agents selling those products for them. These are the people and organizations you’ll be in contact with for both the purchase and maintenance of your insurance policy. Now that you know what to look for in your insurance, how do you decide where to buy it?
Pay attention to financial strength ratings.
A good insurance company should have top financial strength ratings from agencies like A.M. Best and Standard and Poor’s, both of which specialize in evaluating insurance companies’ ability to pay claims and stay in business for the long run. Ideally, the insurance company you choose would have a rating of at least A- from A.M. Best and A from Standard & Poor’s.
To give you some context, here’s how A.M. Best’s Financial Strength Ratings (FSR) Scale works (which is similar to that of Standard & Poor’s but a little more concise):
|RATING CATEGORY||RATING SYMBOLS|
|Superior||A+ to A++|
|Excellent||A to A-|
|Good||B+ to B++|
|Fair||B to B-|
|Marginal||C+ to C++|
|Weak||C to C-|
|Poor||D to –|
If you buy your insurance from an agent, make sure to ask which insurance company is backing the policy and what its financial strength rating is.
Focus on customer experience and communication.
Additionally, you’ll want to look for an insurance company that offers an easy, accessible experience for its customers. Does the company have a good customer service reputation? Does it have a staff of licensed insurance professionals who can help you with any questions you have? Can you communicate with the company in the way(s) you prefer (e.g., telephone, e-mail, or chat)? Does it have a digital platform that allows you to access your insurance information quickly and easily? When you’re vetting different insurance companies, don’t be shy—call them up or visit their websites and try them out. Then, decide whether you liked the experience you had with them. You’ll have your own preferences, but don’t underestimate how important these considerations can be from a practical perspective.
Understand the company’s claims process.
Perhaps the most important question is, what can you expect if a claim comes up? Does the company make it easy to submit a claim? Does it get good reviews for its claims-handling service? And does the company directly manage the claims process—or does it rely on a third party to handle everything? Having a claim made against you is stressful enough—your insurance company can alleviate much of this tension by being accessible 24/7, easy to work with, and responsive to your needs if you find yourself having to defend yourself.
Hopefully, this run-down will help answer the most common questions around why PTs should consider buying medical malpractice insurance. You now know what it covers, what the “must-have” versus “nice-to-have” coverages are, and what you should look for in the insurance company that stands behind the product. I’m proud to work for Berxi, a division of Berkshire Hathaway Specialty Insurance that offers malpractice insurance to both employed and self-employed PTs. That said, you have a variety of options at your disposal, so it’s important that you do your homework and vet each one thoroughly before you make your decision. As you go through the process, keep in mind the considerations I raised above, as well as your own personal preferences. This information will ultimately help guide you toward the right insurance company—and policy—for your specific needs.
Evelyn Bavier is the product development and portfolio director at Berxi, the small commercial insurance division of Berkshire Hathaway Specialty Insurance Company. She has more than 15 years of experience in the insurance industry in both legal and product development roles, with a specialty in professional liability insurance across a wide range of industries. Evelyn has a law degree from Georgetown University and a bachelor’s degree in economics from the University of Pennsylvania.