Occupational therapy liability insurance

A Quick Run-Down on Occupational Therapy Liability Insurance

When working in healthcare, you may hear horror stories of what can happen when there is a dispute or medical error with a patient and their healthcare provider. Some malpractice stories are worse than others, but these types of situations can get very complicated and costly when lawyers get involved. While these situations are not super common, it’s a good idea to make sure you are protected as an OT or COTA if you are personally impacted with one of these terrible situations.

Thankfully, there are several options for occupational therapy liability insurance that can provide you with peace of mind for those “what if” scenarios, even if they are rare. Most employers will provide you with liability insurance (more on this below), but regardless I wanted to share some information about the three types and what else you should know, especially if you are self-employed and need to purchase your own.

I want to note that I’m writing this article from an unbiased perspective, and I am not affiliated with any OT liability insurance companies or getting any sort of compensation from the ones listed below. I just want you to know what options are out there if you need to get your own liability or malpractice insurance.

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In the U.S., there are many different types of liability insurance with policies that can be very complex, but the 3 most common types of liability insurance for occupational therapists and COTAs are:

  • Professional Liability
  • General Liability
  • Product Liability

In this article, we will discuss all three policy types, their application, and whether or not you might need to get liability insurance on your own.

1. Professional Liability Insurance

This insurance provides coverage in the event that a patient makes a claim that arises from occupational therapy services that have been provided. A specific example includes a patient falling and getting injured during a transfer, and more broadly includes errors in advice, a failure to deliver services, or negligence in providing services to the patient.

The main purpose of occupational therapy liability insurance is to provide financial support to the insured therapist to help pay for legal expenses if there are allegations or a lawsuit. This might include costs for attorney’s fees, court fees, settlements, judgments, etc. There are maximum coverage limits that vary by policy, but a typical legal case can cost tens of thousands of dollars.

2. General Liability Insurance

This protects the insured party against claims that might arise from any events that occur within the facilities you rent or own. This is broader than just professional liability and can provide further peace of mind for therapists that own their own practice.

Some examples of what could be covered include:

  • Bodily Injury Coverage: If someone is injured on your business premises.
  • Property Damage Coverage: If your business somehow causes damage to someone else’s property.
  • Advertising Injury Coverage: protects against claims of libel, slander, copyright infringement, or other forms of advertising-related injury.
  • Legal Defense Costs: Similar to professional liability, general liability covers legal defense costs, including attorney fees, court costs, and settlements or judgments.

In conjunction with professional liability insurance, these two policies are the most common for practicing occupational therapists.

3. Product Liability Insurance

The third type of insurance an occupational therapist might need is called product liability insurance. This is designed to protect businesses from financial losses associated with claims of injury or property damage caused by products they use on patients, manufacture, distribute, or sell.

An example might be an injury resulting from a defective or malfunctioning piece of exercise equipment that was used or administered during your therapy session. In the event of a product liability claim or lawsuit, the insurance policy covers legal defense costs, including attorney fees, court fees, and settlements or judgments, up to the policy limit.

This type of insurance goes above and beyond the first two types of insurance (professional and general liability) and provides even further peace of mind for the therapist providing services.

ot liability insurance

Do I need OT liability insurance if I am self-employed?

Usually, the answer is yes! If you are a self-employed OT that interacts with patients or clients under your own brand name or business, you are open to potential risk of allegations or even a lawsuit. If so, you should speak with an insurance agent or other insurance professional that can help explain your options so you can make the best decision about what type of policies make sense for you and how much coverage you need to feel secure.

Do I need my own insurance as an employee?

If you are an employee of a healthcare company, more than likely you are covered under the professional liability insurance policy of the healthcare system or clinic, even if you are a PRN employee without other benefits. Typically, occupational therapists and COTAs will be able to fully rely on the coverage provided by their employer without needing to buy their own.

For example, every hospital I’ve worked at has automatically provided professional liability coverage for me and any other hands-on healthcare providers.

I do want to note that an employer’s insurance policy may leave some gaps in coverage in the event of a malpractice lawsuit or licensing complaint against an OT. Employer policies generally will protect the business and employees first and foremost, but there could be situations where both the business is held liable and the individual is held separately liable. You can reach out to your company’s insurance provider to clarify more on this.

Lastly, employer policies will not cover you for any OT-related work you might engage in outside of the workplace, so keep this in mind if you are working with patients on your own time.  

Where can I get liability insurance as an OT?

If you don’t have an employer that provides you with liability insurance, there are a few options in the marketplace that I found in my research, with most averaging around $200/year (with some being a little less, some being a little more). While My OT Spot is not affiliated with any of these insurance companies, these four appear to be the most common providers.

However, I strongly encourage you to do your own research, talk to an insurance agent and read up on any policy before entering into a contract.

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Wrapping up, as occupational therapy practitioners, the last thing we want to think about is having to get pulled into a scary, costly, and time consuming legal battle over care that we provided.

But unfortunately this is the reality of the world we live in, and it’s important to protect ourselves throughout our careers. Ensuring that you have the right insurance policy for your needs is important to protect yourself financially and to protect your career long-term.

I hope this helped to give you a good run-down of the basics of OT liability insurance and helps to encourage you to get some coverage if you are not covered already. If you have any follow-up questions or want to learn more, be sure to reach out to a liability insurance provider and/or your workplace’s insurance company to further guide you on what you need to be fully covered.

This information provided in this article is for informational purposes only and is not a replacement for legal advice or insurance advice. While efforts have been made to ensure the accuracy and reliability of the information presented, it may not apply to your specific circumstances or jurisdiction. Insurance policies and regulations vary by location and industry, and the coverage options discussed in this article may not be suitable for every individual or business. It is important to consult with a qualified insurance agent, broker, or legal advisor to obtain advice tailored to your particular situation.

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