Healthcare providers face a patchwork of state laws and regulations requiring certain types and amounts of liability insurance. Although all healthcare professionals should procure policies covering alleged negligence in healthcare, whether they are required to do so varies by state. Surprisingly, many states do not require medical malpractice or other liability insurance. Of the states that do, the requirement is often limited to providers such as licensed physicians. Other states use expansive definitions of healthcare providers in their insurance statutes and regulations, while still other states impose separate insurance requirements for specific fields such as occupational and physical therapy. Failure to procure the required insurance can lead to penalties or fines. Careful healthcare practitioners should ensure that they procure insurance policies that comply with their states’ minimum requirements and should consult with their insurance advisors to ensure adequate coverage for potential liabilities arising out of their work.
In Indiana, for example, a wide range of medical professionals must provide minimum amounts of insurance or other proof of financial responsibility. The state imposes uniform insurance requirements for many different healthcare providers, including physicians, nurses, optometrists, psychologists, and physical therapists. Indiana Code § 34-18-4-1 requires such healthcare providers to provide malpractice insurance or other proof of financial responsibility in the form of cash or surety bonds or proof of insurance for three times the limits of liability set forth in Indiana Code § 34-18-14-3 (which range from $250,000 to $500,000 per occurrence).
Other states impose statutory minimum insurance limits but restrict them to fewer categories of healthcare professionals. For example, Rhode Island requires all “active medical or dental professionals” to carry medical malpractice insurance coverage of at least “one million dollars ($1,000,000) for claims arising out of the same professional service and three million dollars ($3,000,000) in the aggregate,” or to secure indemnification coverage (230 R.I.C.R. 20-10-1.5). “Medical and dental professionals” are narrowly defined as licensed physicians or dentists. No regulations or statutes impose insurance minimum limits for occupational or physical therapists.
Other states, by contrast, create specific insurance requirements for different types of healthcare providers. Pennsylvania and Kansas are two good examples. Pennsylvania requires all occupational therapists to maintain professional liability insurance of at least one million dollars per occurrence or claim (49 Pa. Code Ann. § 42.61). This insurance requirement is expressly incorporated into the licensing requirements (49 Pa. Code Ann. § 42.13). Pennsylvania requires physical therapists to maintain the same amount of professional liability insurance (49 Pa. Code Ann. § 40.69) and incorporates that into the licensing requirements as well (63 Pa. Stat. and Cons. Stat. Ann. § 1309).
Kansas, for its part, requires licensed occupational therapists to maintain the amount of insurance set forth by the Kansas State Board of Healing Arts, consisting of “(1) [i]ndividual coverage of not less than $100,000 per claim, subject to an annual aggregate of not less than $300,000 for all claims made during the period of coverage; or (2) coverage through the individual’s employer under an additional insured policy for which the limit is not less than $1,000,000 per claim, subject to an annual aggregate of not less than $3,000,000” (Kan. Stat. Ann. § 65-5423; Kan. Admin. Regs. 100-54-13). Similarly, Kansas requires physical therapists licensed or practicing in the state to maintain the minimum limits of insurance set forth by the Kansas State Board of Healing Arts (Kan. Stat. Ann. § 65-2920), which is currently $100,000 per claim, subject to an annual aggregate of not less than $300,000 for all claims made during the period of coverage (Kan. Admin. Regs. 100-29-15).
All in all, the necessity of insurance and the minimum required insurance limits vary widely between states. Some states impose no requirements for liability insurance for healthcare providers, while some limit those requirements to physicians, some extend the same requirements across multiple categories of healthcare professionals, and still others set forth different minimum limits for different types of providers. Although healthcare providers should always confirm that they have coverage, they should also consult with counsel to confirm that their coverage satisfies any applicable state requirements and adequately protects them in the event of a claim.
