Starting a medical practice in Pennsylvania? You're probably focused on patient care, hiring staff, and finding the perfect location. But here's something that can't wait: getting the right insurance coverage isn't just a smart business move—it's a legal requirement before you can see your first patient.
Pennsylvania has some unique insurance requirements for medical practices that catch a lot of new practitioners off guard. Unlike many other states, Pennsylvania operates a two-tier professional liability system that requires both private insurance and participation in a state fund. Add in workers' comp mandates and general liability coverage, and you've got a lot to navigate. Let's break it all down so you can focus on what you do best: taking care of patients.
Professional Liability Insurance: Pennsylvania's Two-Tier System
Here's what makes Pennsylvania different: you can't just buy a standard malpractice policy and call it a day. The state requires you to participate in what's called the Medical Care Availability and Reduction of Error (MCARE) Fund. Think of it as a two-part system designed to ensure there's enough coverage when things go wrong.
You need $1 million per occurrence and $3 million aggregate total coverage. But you can't get it all from one place. Instead, you'll purchase $500,000/$1.5 million in private medical malpractice insurance from a commercial carrier, and then the MCARE Fund automatically provides the additional $500,000/$1.5 million in excess coverage. This brings you to the required $1 million/$3 million total.
The MCARE Fund isn't free, though. For 2026, you'll pay an annual assessment of 29% of your prevailing primary premium. That rate was published in October 2025 and stayed the same as the 2025 rate. What does that mean in real dollars? If your primary premium would have cost $10,000, you're paying an additional $2,900 to the MCARE Fund. This isn't optional—it's mandatory for licensure, and the State Board of Medicine can suspend or revoke your license if you don't comply.
This requirement applies to physicians, eligible unrestricted residents, and nurse-midwives. Other healthcare professionals like physical therapists and occupational therapists need to maintain their own $1 million per occurrence professional liability coverage, though they're not required to participate in MCARE the same way physicians are.
Workers' Compensation Insurance: No Exemptions
If you're hiring anyone—and I mean anyone—you need workers' compensation insurance in Pennsylvania. There's no minimum number of employees, no exemption for part-time workers, and no grace period. Hire one medical assistant, one receptionist, or one billing specialist? You need coverage the day they start.
Pennsylvania doesn't mess around with enforcement, either. Operating without required workers' comp coverage can result in daily fines, stop-work orders, and even criminal prosecution. For 2025, the maximum weekly benefit for injured workers increased to $1,347, and your insurance needs to cover full medical treatment with no deductible or co-pay when employees use approved providers.
Here's something that surprises a lot of medical practice owners: Pennsylvania allows you to post a panel of at least six approved medical providers, and your injured employees must use one of those doctors for the first 90 days after their injury. At least three must be physicians, and no more than four can be coordinated care organizations. After 90 days, they can choose their own doctor and reasonable treatment should still be covered. This gives you some control over treatment quality and costs in those critical early weeks.
General Liability Insurance: The Coverage You Can't Ignore
Professional liability insurance protects you from malpractice claims. Workers' comp covers employee injuries. But what happens when a patient slips on a wet floor in your waiting room? Or when someone claims your marketing materials defamed a competitor? That's where general liability insurance comes in.
Pennsylvania doesn't mandate specific minimum limits for general liability coverage for medical practices, but that doesn't mean you can skip it. Most commercial leases require it. Many hospital credentialing committees require it. And if you're signing contracts with insurance networks or healthcare systems, they'll almost certainly require proof of coverage with limits of at least $1 million per occurrence and $2 million aggregate.
General liability covers bodily injury and property damage that happens on your premises, advertising injuries, and personal injury claims. It's the safety net for all the things that can go wrong in running a business—things that have nothing to do with the actual practice of medicine. A common policy costs a few hundred to a couple thousand dollars annually depending on your specialty and location, and it's money well spent.
Licensing Requirements and Insurance Compliance
Here's a critical timeline issue that catches new physicians: you can't practice medicine in Pennsylvania until you have your insurance in place. When you're approved for licensure, the State Board of Medicine notifies you that you can only begin practicing after complying with Section 711 of the MCARE Act by securing both your private malpractice insurance and paying your MCARE assessment.
Don't wait until the last minute. Getting professional liability insurance can take several weeks, especially if you're a new practitioner without a claims history. Start the application process as soon as you know you'll be practicing in Pennsylvania. The MCARE Fund monitors compliance closely, and if they don't receive proof of your insurance and assessment payment, they're required by law to report you to the licensing board for potential suspension or revocation.
There's good news on the horizon, though. Starting July 7, 2025, Pennsylvania joined three interstate health care compacts, which means if you're licensed in Pennsylvania, you can now apply to care for patients in more than 30 other states and U.S. territories. This is a game-changer for telemedicine and multi-state practices, but remember—each state may have its own insurance requirements you'll need to meet.
Getting Started: Your Insurance Checklist
Setting up insurance for your Pennsylvania medical practice doesn't have to be overwhelming if you approach it systematically. Start by shopping for professional liability insurance from carriers approved to write coverage in Pennsylvania. Get quotes from multiple insurers—rates can vary significantly based on your specialty, location, and claims history.
Once you have your primary professional liability policy in place, you'll register with the MCARE Fund and pay your assessment. They'll coordinate the excess coverage automatically. If you're hiring employees, secure workers' compensation coverage before anyone starts work—no exceptions. And before you sign your office lease or any professional contracts, get a general liability policy with limits that meet your contractual obligations.
Consider working with an insurance broker who specializes in medical practices. They understand Pennsylvania's unique requirements and can help you navigate the MCARE system, find competitive rates, and make sure you're not over-insured or, worse, under-insured. The right insurance setup protects not just your practice, but your personal assets and your ability to continue caring for patients.
