Here's something that catches most new physical therapy practice owners off guard: you can do everything right clinically, follow every treatment protocol to the letter, and still face a lawsuit. Why? Because a patient tripped over their gym bag in your waiting room and broke their ankle. Or because an exercise band snapped during treatment and hit someone in the face. That's where general liability insurance comes in—and it's just as critical as your professional liability coverage.
If you're opening a physical therapy clinic, joining a hospital network, or even doing home visits as an independent PT, you'll quickly discover that general liability insurance isn't optional. Hospitals want to see your certificate of insurance before credentialing you. Landlords require it before you sign a lease. And in some states, licensing boards won't let you practice without it. Let's break down what this coverage actually does and why every physical therapist needs it.
What General Liability Insurance Actually Covers
General liability insurance protects your physical therapy practice against claims of bodily injury and property damage caused to third parties—meaning anyone who isn't you or your employees. Think of it as your safety net for everything that can go wrong in your clinic that has nothing to do with your actual treatment decisions.
The most common claim? Slip and fall accidents. A patient slips on your freshly mopped lobby floor and breaks their wrist. Your general liability policy covers their medical bills, lost wages, and your legal defense costs if they sue. The same applies if someone trips over equipment you left in a walkway or falls off a treatment table.
Property damage coverage is equally important. Let's say you're doing a home visit and accidentally knock over an expensive lamp. Or maybe a patient sets their phone on your desk while checking in, and it falls and shatters. General liability covers the cost of replacing or repairing that property. For PTs who do mobile therapy, this coverage extends to patient homes, gyms, or assisted living facilities where you work.
Most policies also include personal and advertising injury coverage. This protects you if someone accuses you of slander, libel, or false advertising. If a competitor claims you copied their marketing materials or a patient says you defamed them on social media, this coverage handles your defense costs.
General Liability vs. Professional Liability: You Need Both
Here's where physical therapists get confused. General liability and professional liability (also called malpractice insurance) sound similar, but they cover completely different risks. Professional liability covers allegations that your clinical work caused harm—like if a patient claims your treatment plan worsened their condition or you failed to diagnose a serious issue. General liability covers everything else that happens on your premises or during business operations.
A simple test: if the injury relates to your professional judgment or treatment technique, it's a professional liability claim. If it relates to your physical space, equipment malfunction (not misuse), or general business operations, it's a general liability claim. An exercise band that snaps and hits a patient? General liability. A patient who claims you prescribed the wrong stretching routine that caused injury? Professional liability.
Most physical therapy practices carry both types of coverage, often bundled together in a Business Owner's Policy (BOP). This is usually more cost-effective than buying separate policies and ensures you're covered from all angles. Professional liability averages around $56 per month, while general liability runs about $37 per month—so you're looking at roughly $90-100 per month for comprehensive protection.
Standard Coverage Limits and What They Mean
When you shop for general liability insurance, you'll see limits written as something like "$1 million / $2 million" or "$1M/$3M." The first number is your per-occurrence limit—the maximum your insurer will pay for a single incident. The second number is your aggregate limit—the total amount the policy will pay for all claims during the policy period, usually one year.
For physical therapy practices, the industry standard is $1 million per occurrence with a $2-3 million aggregate. This is what most hospitals and credentialing bodies require before they'll grant you privileges. If you're working with larger healthcare systems or serving high-risk populations, they might require higher limits—sometimes $2 million per occurrence and $4 million aggregate.
Don't be tempted to save money by going with minimum coverage just to meet requirements. A serious slip-and-fall case with long-term injuries can easily exceed $500,000 when you factor in medical bills, lost income, pain and suffering, and legal fees. If you exhaust your per-occurrence limit, you're personally responsible for the rest. The difference in premium between $1M/$2M coverage and $2M/$4M coverage is often only $10-20 per month—worth it for the peace of mind.
When You'll Need to Show Proof of Coverage
Your certificate of insurance (COI) is going to become one of your most important business documents. This single-page document proves you have active coverage and lists your policy limits, coverage dates, and what's included. Most insurers email it to you immediately after payment, and you can usually request additional copies anytime through an online portal.
Expect to provide your COI in these situations: hospital credentialing and privileges applications, contracts with rehabilitation centers or nursing homes, lease agreements for clinic space, contracts with home health agencies, applications for business licenses in some cities, and Medicare or insurance panel applications. Some states also require physical therapists to maintain minimum coverage amounts as a condition of licensure. Pennsylvania, for example, mandates at least $1 million per occurrence in professional liability coverage, and many states are moving toward similar requirements.
If you work for multiple facilities or maintain privileges at several hospitals, each one will want to be listed as an "additional insured" on your policy. This costs little or nothing to add and provides them protection if a claim involves both you and their facility. Your insurer can add these endorsements quickly—just expect to pay a small fee of $25-50 per additional insured in most cases.
How to Get the Right Coverage for Your Practice
Start by determining what coverage limits you need. Check any contracts or credentialing requirements from hospitals or facilities where you work—they'll specify minimum amounts. If you own your clinic, your commercial lease will likely require general liability coverage with the landlord listed as additional insured. And check your state licensing board's website for any mandatory coverage requirements.
Consider whether you need a standalone general liability policy or a Business Owner's Policy that bundles general liability, professional liability, and property coverage. If you own a clinic with equipment, furniture, and computers worth protecting, a BOP usually makes more sense and costs less than buying everything separately. If you're an independent contractor doing primarily mobile work, a standalone policy might be sufficient.
Work with an insurance broker who specializes in healthcare or specifically physical therapy coverage. They'll understand the unique risks of PT practices and can often access specialized insurers that offer better rates or more comprehensive coverage than general business insurers. Organizations like the American Physical Therapy Association (APTA) also offer endorsed insurance programs designed specifically for PTs, often at competitive group rates.
When you get quotes, don't just compare premiums—look at what's actually covered, the deductibles, and whether you're getting occurrence-based or claims-made coverage. Occurrence-based policies cover incidents that happen during the policy period, even if the claim is filed years later. Claims-made policies only cover claims filed while the policy is active. For general liability, occurrence-based is usually better and often standard.
General liability insurance isn't the most exciting business expense, but it's one of the most important. It protects your practice from common accidents that have nothing to do with your clinical skills but could still destroy your business financially. For less than the cost of a gym membership, you get protection against slip-and-falls, property damage claims, and the legal fees that come with them. Get quotes from specialized healthcare insurers, make sure your limits meet all contractual requirements, and keep your certificate of insurance handy—you'll need it more often than you think.
