Physical Therapist Business Insurance (2025)

Physical therapist business insurance helps protect you and your practice if something goes wrong on the job. For example, if a client claims your treatment caused an injury or worsened their condition, the insurance can help cover the costs.

It also protects you from other risks, like legal fees if you’re sued, or expenses related to professional mistakes. This kind of insurance helps keep your physical therapy practice running smoothly, even when unexpected issues arise.

Why Do Physical Therapists Need Insurance?

Physical therapists need insurance to protect against many things, not least of which is malpractice and negligence claims particularly because of the inherent risk of unintended accidents with physical therapy. Without the right insurance, a physical therapist might be on the hook for defending themselves in a lawsuit costing potentially thousands of dollars.

Then you add the risk of non-medical liabilities especially if a physical therapist operates a clinic or owns their clinic with the added risk of things like slip and fall accidents, where general liability insurance could provide protection for the business from claims of property damage, bodily injury, or even lawsuits.

It also adds credibility, many clients require proof of insurance before hiring a physical therapist. Whether you’re a solo therapist or run a clinic, having the right insurance helps you operate confidently, knowing you’re covered if something goes wrong.

What Insurance Do Physical Therapists Need?

Running a Physical Therapist business involves more risk than most people realize. You’re working with clients on their health and well-being, sometimes inside clients’ homes or in a clinic, with patients who might be at risk of further injury or illness.

To protect yourself and your business, here’s a breakdown of the most important insurance policies to consider.

Professional Liability Insurance (Malpractice)

What it is: Professional liability insurance is the most essential form of business insurance for physical therapists to protect against injury and accidents.

What it covers: If there is any negligence, errors, or omissions when providing care for a patient this can cover the costs of any lawsuits or settlements.

Example: A client is injured because of a mistake or a therapist for getting to give them a crucial piece of instruction. This type of insurance would cover any medical malpractice lawsuit that might follow.

The average cost of professional liability insurance for physical therapists ranges between $89 and $1,500 per year.

General Liability Insurance

What it is: This is the foundational insurance policy for most small businesses. It protects you from third-party claims of bodily injury, property damage, and personal injury.

What it covers: If someone gets hurt because of your work, general liability pays for legal fees, repairs, or medical bills.

Example: A client is accidentally injured while undergoing a therapy session and threatens to sue for their medical bills. General liability insurance can cover the cost of any damages and any legal fees if a lawsuit follows.

Workers’ Compensation Insurance

What it is: This policy covers your employees if they get injured or become ill as a result of their job.

What it covers: Medical bills, lost wages, rehabilitation, and even death benefits. It’s also required by law in most states if you have employees.

Example: One of your therapists at a clinic slips on a wet floor and breaks their wrist. Workers’ comp pays for their ER visit and covers time off while they recover.

Workers’ compensation insurance is required for physical therapy businesses with employees in almost every state.

Commercial Auto Insurance

What it is: If you or your employees drive for business purposes, personal auto insurance likely won’t cover accidents. Commercial auto fills that gap.

What it covers: Vehicle damage, injuries, and liability if you’re involved in an accident while driving for work.

Example: One of your employees rear-ends a car while driving to a client’s home in the company van. Commercial auto covers the damages and medical costs.

Physical therapist companies pay an average of $138 per month, or $1,652 per year, for commercial auto insurance.

Business Owner’s Policy (BOP)

What it is: A BOP bundles general liability and  into one policy, often at a lower cost than buying them separately.

What it covers: Property damage to your business location or equipment, along with liability protection.

Example: A fire at your clinic damages supplies and business records. A BOP helps you recover both the physical and financial losses.

Commercial Property Insurance

What it is: If you own or lease space for your business, this policy covers the physical building and the contents inside.

What it covers: Fire, vandalism, theft, weather damage, and more, anything that could physically impact your business premises or equipment stored there.

Example: A storm causes water damage to your main clinic, ruining thousands of dollars’ worth of equipment and office supplies. commercial property insurance helps you recover.

Business Personal Property (BPP) Insurance

What it is: BPP is a type of property insurance specifically for movable items like the exercise tables for stretching, tools, computers, and office furniture used in your business.

What it covers: Repair or replacement of these items if they are damaged or destroyed due to fire, theft, or other covered events.

Example: A fire in your clinic damages treatment tables, resistance equipment, and office laptops. Business Personal Property (BPP) insurance helps cover the cost to replace these essential items so you can get back to treating patients.

Hired And Non-Owned Auto (HNOA) Insurance

What it is: This policy covers liability if you or your employees use personal or rented vehicles for business purposes.

What it covers: If an employee causes an accident while using their personal car for a work errand, HNOA provides liability coverage where personal auto insurance might fall short.

Example: You send an employee to pick up extra exercise bands for the clinic using their own car, and they get into a minor accident. Hired and Non-Owned Auto Insurance (HNOA) can help cover the liability claim, protecting your business from unexpected costs.

Umbrella Insurance

What it is: Umbrella coverage provides extra protection beyond the limits of your existing policies, like general liability and commercial auto.

What it covers: Once a claim exceeds the limits of your underlying policy, umbrella insurance kicks in to cover the remaining amount.

Example: You’re sued for $1 million after a client claims bodily injury from an exercise product you used. Your general liability policy caps at $500,000. Umbrella insurance can cover the remaining $500,000.

Cyber Liability Insurance

What it is: This covers losses related to cyberattacks, data breaches, and other digital risks, particularly important if you store client info online.

What it covers: Legal costs, notification expenses, and credit monitoring for affected clients.

Example: Your scheduling software is hacked, and client addresses and payment details are leaked. Cyber liability helps manage the fallout.

Together, these policies form a comprehensive insurance plan for physical therapy businesses. While not every business needs all of them, understanding your risks and matching them with the right coverage ensures your operation stays protected, whether you’re a solo therapist or manage a growing team.

Physical Therapist Insurance Requirements

Physical therapy businesses are generally not mandated by federal law to carry specific insurance policies. However, certain types of insurance may be required depending on state laws, local regulations, and the nature of your business operations.

Workers’ Compensation Insurance

In most states, if you have employees, you’re required to carry workers’ compensation insurance to cover medical expenses and lost wages for work-related injuries or illnesses. However, Texas does not mandate this coverage for private employers, though it’s still highly recommended to protect both your employees and your business.

Commercial Auto Insurance

If your physical therapy business owns vehicles used for work purposes, or you are an independent therapist using a vehicle for work, most states require commercial auto insurance to cover liabilities arising from accidents. In Texas, commercial auto insurance is mandatory for business-owned vehicles.

General Liability Insurance

While not legally required, general liability insurance is often necessary to secure contracts and is highly recommended to protect against claims of property damage or bodily injury. Some clients or landlords may require proof of this coverage before doing business with you.

It’s important to check with your local city or county government to understand specific licensing and insurance requirements applicable to your area.

How Much Does Physical Therapist Insurance Cost?

Physical therapist business insurance typically costs between $89 and $1,500 per year depending on many factors particularly whether you work as an independent physical therapist or run a clinic and if so, how large that clinic is. For solo providers with no employees rates can fall at the lower end of this range.

However, if you offer a large-scale physical therapy clinic with multiple employees, you have vehicles for work, or you need to add things like commercial property insurance, your premiums could be higher, sometimes exceeding $2,000 annually.

Several factors influence the cost of coverage, including your business location, the number of employees, the types of services you offer, the records you keep (HIPAA requirements might necessitate additional coverage for things like cyber protection), your claims history, and whether you transport expensive equipment.

Insurers also consider the amount of coverage you choose and whether you package policies together. While it may be tempting to go with the cheapest option, it’s important to choose a plan that truly protects your business from its most likely risks.

How Is Your Physical Therapist Insurance Cost Calculated?

Insurance underwriters calculate your physical therapist insurance premium based on several key risk factors unique to your business. One of the biggest considerations is the size and scope of your operation—solo therapists typically pay less than businesses with multiple employees.

The services you offer also matter; if you specialize in high-risk work or provide additional medical services at your facility, your rates may be higher. Location plays a role, too, since insurance costs can vary by state, city, or even ZIP code.

Underwriters also look at your claims history—if you’ve filed previous insurance claims, you could be seen as a higher risk. The value of your equipment, whether you own or lease business vehicles, and the type and amount of coverage you choose all factor into the cost as well. Even your business structure (LLC vs. sole proprietor) can affect how your policy is priced.

Tips To Lower Your Physical Therapist Insurance Costs

Insurance costs can add up quickly for physical therapy businesses, but there are practical ways to keep your premiums manageable without skimping on coverage. The key is to understand which factors you can control and take proactive steps to minimize risk.

• Bundle your policies. Combine general liability, property insurance, and other coverages into a Business Owner’s Policy (BOP) to qualify for a multi-policy discount.
• Consider Hired and Non-Owned Auto (HNOA) coverage. If you or your employees use personal vehicles for work, HNOA can be more cost-effective than a full commercial auto policy.
• Keep a clean claims history. Avoiding claims through proper training and safety procedures can lower your risk profile and lead to reduced premiums over time.
• Invest in workplace safety. Implementing safety protocols and training for employees helps reduce the chances of injury claims and can lower workers’ compensation costs.Implementing risk management programs and mitigation for things like cyber attacks can also help.
• Raise your deductible. Opting for a higher deductible can lower your monthly premium, but be sure your business can absorb the extra out-of-pocket cost in case of a claim.
• Review your coverage annually. Adjust your policies as your business evolves to avoid paying for coverage you no longer need.
• Compare quotes from multiple insurers. Rates vary widely, so shopping through Insuranceopedia can help you find the best deal for your current needs.

Taking a strategic approach to your insurance planning can make a real difference in your bottom line. With a little research and regular review, you can stay protected and cost-efficient at the same time.

Following these steps helps ensure you’re properly insured and set up to handle risks confidently and professionally.