Running a medical practice in New York means navigating one of the most complex insurance landscapes in the country. Whether you're opening your first clinic or expanding an existing practice, understanding your insurance obligations isn't optional—it's essential. The good news? While New York's requirements might seem overwhelming at first, they're actually more flexible than many physicians realize. Let's break down exactly what coverage you need, what's technically optional but practically required, and how 2025's regulatory changes might affect your practice.
Workers' Compensation: The Non-Negotiable Requirement
Here's the one insurance requirement in New York that has zero wiggle room: workers' compensation. If you employ even one person—a receptionist working 10 hours a week, a nurse, even a family member you pay—you must carry workers' comp coverage. No exceptions, no minimum employee thresholds, no waiting periods.
As of January 1, 2025, the minimum weekly benefit increased to $325, up from $275 in 2024. Injured workers receive approximately two-thirds of their average weekly wage, capped at $1,222.42 per week as of July 2025. For medical practices, this coverage protects you from potentially devastating lawsuits if an employee gets hurt on the job—whether it's a needle stick injury, a back strain from lifting equipment, or even repetitive stress injuries from administrative work.
The 2025 changes bring some significant updates for medical practices. First, the state now automatically authorizes all eligible licensed healthcare providers to treat workers' compensation patients. Previously, only about 10% of eligible providers had taken the additional steps to become Board-authorized. This means if your existing patients get injured at work, they can continue seeing you for treatment without switching providers. The state is also increasing medical fee schedules to align more closely with private insurance rates, making workers' comp patients more financially viable for your practice.
Another major change: expanded mental health coverage. New York previously limited work-related stress and PTSD claims to first responders, but as of 2025, all workers can submit claims for mental health conditions triggered by workplace circumstances. For medical practices, this means your employees facing burnout, workplace stress, or traumatic incidents can now access benefits.
Medical Malpractice Insurance: Technically Optional, Practically Required
Here's where New York gets interesting. The state doesn't legally require physicians to carry medical malpractice insurance. You could, in theory, practice medicine completely uninsured. But there's a massive gap between what's legal and what's practical.
General hospitals in New York almost universally require physicians to maintain professional liability insurance before granting privileges. The standard requirement is $1.3 million per claim and $3.9 million aggregate coverage. If you want to admit patients, perform surgeries, or collaborate with hospital-based specialists, you'll need this coverage. Some hospitals push these requirements even higher—sometimes to $2.3 million per claim and $6.9 million aggregate—particularly for high-risk specialties.
There is one group of physicians for whom malpractice insurance is legally mandatory: those who've been disciplined by the Medical Board of Professional Misconduct. If you're under Board monitoring, you must carry minimum coverage of $2 million per claim and $6 million aggregate. This requirement ensures that patients have recourse if problems continue.
Malpractice premiums in New York vary dramatically by specialty. According to 2026 data, dermatologists without surgery average around $20,400 annually for standard $1M/$3M coverage. General surgeons pay approximately $112,200, while OB/GYNs performing major surgery face premiums around $173,400. These figures reflect New York's unique insurance market, where unlimited occurrence policies are still available—a rarity in most states.
Understanding the difference between claims-made and occurrence policies matters. Claims-made policies cover incidents that occurred during the policy period, but only if you file the claim while the policy is active. If you retire or switch carriers, you'll need tail coverage—essentially an extension that covers claims filed after your policy ends. Tail premiums typically run about 200% of your annual premium, which for a general surgeon could mean a $224,400 one-time cost. Occurrence policies, more common in New York than elsewhere, cover incidents based on when they occurred, regardless of when the claim is filed. You're covered indefinitely for anything that happened during the policy period, even if the claim surfaces decades later.
General Liability: Protection Beyond Medical Care
Medical malpractice insurance covers your professional services, but what about everything else? That's where general liability insurance comes in. This coverage protects your practice against non-medical claims: a patient slips on your wet lobby floor, your contractor damages a neighboring office during renovations, or your marketing accidentally uses copyrighted material.
While New York doesn't mandate general liability coverage, most commercial leases require it. The standard minimum is $1 million in coverage, which typically costs medical practices $500 to $1,500 annually depending on your office size and patient volume. If you're signing a lease for medical office space, expect your landlord to require proof of general liability insurance with them listed as an additional insured. Some landlords require $2 million in coverage, especially for larger spaces or shared medical buildings.
Many medical practices bundle general liability with property insurance in a Business Owner's Policy (BOP), which often provides better coverage at lower premiums than purchasing policies separately. A BOP typically includes coverage for your medical equipment, furniture, computers, and supplies, plus business interruption insurance if a fire or other covered event forces you to close temporarily.
New York's Unique Legal Environment
Understanding your insurance needs requires understanding New York's legal landscape. Unlike many states, New York imposes no caps on economic or non-economic damages in medical malpractice cases. A jury can award unlimited amounts for medical bills, lost wages, pain and suffering, and emotional distress. This creates significant exposure for uninsured or underinsured physicians.
The statute of limitations for medical malpractice claims is two years and six months (30 months) from the date of alleged malpractice or the end of continuous treatment for the same condition. This extended timeframe means you need continuous coverage even after incidents occur. It's also why occurrence policies, while more expensive upfront, can provide better long-term protection and peace of mind.
Getting Your Coverage in Place
Start with the absolute requirement: workers' compensation. Contact the New York State Workers' Compensation Board or work with an insurance broker to secure coverage before hiring your first employee. Even if you're starting as a solo practitioner, get this in place before bringing on any help, including contractors who might be classified as employees.
Next, secure medical malpractice insurance that meets hospital credentialing requirements—typically $1.3M/$3.9M. Get quotes from multiple carriers and pay close attention to whether policies are claims-made or occurrence. Ask about tail coverage costs upfront if you're considering claims-made policies, as these can significantly impact your long-term costs if you retire, relocate, or switch carriers.
Finally, address general liability coverage. Review your lease requirements and get at least $1 million in coverage. Consider a BOP if you're leasing space and have significant equipment or property to protect. Working with an insurance broker who specializes in medical practices can help you navigate these requirements efficiently and often secure better rates through their relationships with carriers.
New York's insurance requirements for medical practices balance mandatory protections for employees with flexibility for physicians. While only workers' compensation is legally required, practical realities make medical malpractice and general liability insurance essential for nearly every practice. The 2025 regulatory changes, particularly around workers' compensation provider authorization and expanded mental health coverage, create new opportunities for practices willing to treat injured workers. Take time to understand your specific requirements based on your specialty, practice setting, and hospital affiliations, and work with experienced insurance professionals to build comprehensive protection that lets you focus on patient care.
