Starting or operating a hospice agency in New York comes with a unique set of insurance requirements that can feel overwhelming. Unlike personal insurance where you're protecting your car or home, hospice insurance requirements blend regulatory compliance, employee protection, and liability coverage into a complex package that keeps your business legally operational and financially protected. If you're planning to launch a hospice service or currently run one, understanding exactly what New York requires—and what it strongly recommends—can save you from costly mistakes and potential shutdowns.
New York's Hospice Licensing Foundation
Before you worry about specific insurance policies, you need to understand the licensing framework. In New York, all hospice and palliative care facilities must obtain an Operating Certificate from the New York State Department of Health. This isn't a simple application—you'll need a Certificate of Need before you can even apply for your Operating Certificate. The state regulates hospice providers under Article 40 of the Public Health Law, which sets the standards for everything from staffing to service delivery.
Here's what surprises most people: the Department of Health won't issue your certificate unless you meet both state and federal requirements. That means you need to qualify for participation under Medicare's Title XVIII provisions. While the regulations don't spell out exact insurance dollar amounts in the licensing statute, the Department of Health evaluates your financial stability and risk management practices during the approval process.
Workers' Compensation: Non-Negotiable Coverage
Let's get to the most clear-cut requirement: workers' compensation insurance. New York has one of the strictest workers' comp laws in the country. If you have even one employee—full-time, part-time, or even a family member on your payroll—you must carry workers' compensation coverage. There's no minimum employee threshold, no small business exemption, no wiggle room. Healthcare workers, including nurses, hospice aides, and administrative staff, all fall under this mandate.
In 2025, New York increased the minimum weekly benefit to $325 for injured workers. Looking ahead to 2026, benefits will equal one-fifth of the state average weekly wage. Workers' comp covers all medical expenses—surgeries, medications, dental work, assistive devices—plus lost wages if an employee misses seven days or more of work. If they're out for 14 days, benefits kick in retroactively from day one.
You're also required to post a notice with your insurer's name, address, phone number, and policy number in a conspicuous location where employees can see it. Skip this step and you could face a $500 fine per violation. It's a small detail that regulators take seriously during inspections.
General Liability and Professional Coverage
Now we enter trickier territory. New York doesn't have a statute that says "hospice providers must carry $X million in general liability coverage." However, that doesn't mean you can operate without it. Most contracts—whether with hospitals, nursing facilities, or insurance companies—will require you to carry general liability insurance with specific minimum limits before they'll work with you. These contract requirements typically range from $1 million to $3 million per occurrence.
General liability protects your hospice if someone gets injured at your facility or during a home visit. Think slip-and-fall accidents, property damage, or allegations of negligence unrelated to clinical care. If a family member trips over equipment during a home hospice visit and breaks their ankle, general liability handles that claim.
Professional liability insurance—sometimes called malpractice insurance—is similarly not mandated by New York statute for hospice providers. At present, physicians practicing in New York aren't required to carry professional liability insurance except in specific disciplinary circumstances. However, the practical reality is different. Medicare and most states require hospice facilities to carry coverage for sexual abuse and molestation claims. Beyond that, most hospice agencies carry professional liability coverage because clinical errors happen, and defense costs alone can bankrupt a small operation.
Specialized Coverage You'll Likely Need
Beyond the basics, most New York hospice providers carry several additional policies that aren't legally required but are practically essential. Commercial auto insurance covers your vehicles if employees drive their own cars for home visits or if you maintain a company fleet. Many policies require hired and non-owned auto coverage even if you don't own vehicles, protecting you when employees use their personal cars for work.
Cyber liability insurance has become increasingly important as hospice agencies handle sensitive patient data covered by HIPAA. A data breach involving patient records can result in massive fines and lawsuits. Directors and officers insurance protects your leadership team from personal liability if someone sues over business decisions. Employment practices liability covers claims of discrimination, wrongful termination, or harassment.
If you operate a hospice residence rather than providing only in-home services, you'll need property insurance covering the building, equipment, and contents. You might also consider business interruption insurance, which replaces lost income if a fire or natural disaster forces you to suspend operations temporarily.
How to Approach Insurance Shopping
Here's the approach that works best: start by contacting the New York State Department of Health to get a current checklist of all requirements for your Operating Certificate application. Then speak with an insurance broker who specializes in healthcare facilities. General insurance agents often don't understand the nuances of hospice coverage, and you'll waste time explaining your business model.
Get quotes from multiple carriers. Workers' compensation rates vary significantly between insurers, and the New York Compensation Insurance Rating Board updates loss costs annually—most recently with changes effective October 1, 2025. Your rates depend on your employee classification codes, claims history, and the insurer's appetite for healthcare risks.
Don't make the mistake of buying only what's legally required. The gap between state minimums and what you actually need can be financially catastrophic. A single malpractice claim or serious injury lawsuit can easily exceed $1 million. Review your coverage annually—as your census grows and you add services, your insurance needs will evolve. Many carriers offer package policies for hospice providers that bundle multiple coverages at a discount compared to buying each separately.
Running a hospice agency in New York means navigating a complex insurance landscape where regulatory requirements, contractual obligations, and practical risk management all intersect. Start with the non-negotiables—your Operating Certificate and workers' compensation coverage—then build a comprehensive insurance program that protects your agency, your employees, and the vulnerable patients you serve. The upfront cost might seem steep, but it's far less than the price of operating uninsured or underinsured when something goes wrong.
