Essential Insurance for Your OT Business
Starting your own side gig or business should be exciting, but the things you need to do and in what order can be overwhelming! So here’s a priority-ordered list of the key types of insurance you should consider, starting with the most essential and adding more as you grow.
1. Professional Liability Insurance (Malpractice Insurance) – Must-Have!
Why? This protects you if a client claims that your treatment caused harm or was ineffective. Even if a claim is baseless, legal defense costs can be expensive.
- Covers legal fees and settlements
- Required in many states for licensed OTs
- Essential whether you’re a sole practitioner or have a team
- Super affordable and worth it. A $1 million policy for one clinician can be under $100/year.
- Need a reference? Try Proliability. AOTA members get a discount!
2. General Liability Insurance – Protects Against Everyday Risks
Why? If a client slips and falls in your office or you accidentally damage a client’s property during a home visit, this insurance has your back.
- Covers bodily injury and property damage claims
- Required by many landlords if you rent a clinic space
- Peace of mind for unexpected incidents
3. Business Property Insurance – Safeguards Your Equipment & Space
Why? If you have expensive therapy equipment, office furniture, or rent a clinic space, this insurance covers damages from fire, theft, or natural disasters.
- Protects therapy tools, computers, and clinic essentials
- Covers repair/replacement costs
- Critical if you own or lease a physical space
4. Workers’ Compensation Insurance – Required If You Hire Employees
Why? If you have staff, this covers their medical expenses and lost wages if they get injured on the job - sometimes it’s simple things like getting hurt transferring a patient or getting bit by a client’s dog on a home visit.
- Legally required in most states for businesses with employees
- Protects your business from costly employee injury claims
- Shows you care about employee well-being
5. Cyber Liability Insurance – A Must for Telehealth or Digital Records
Why? If you store client records electronically (EHRs) or provide telehealth services, you need protection against data breaches and cyberattacks.
- Covers legal fees, fines, and notification costs in case of a breach
- Helps recover lost data and protect client confidentiality
- Critical as more OT practices go digital
6. Disability Insurance – Protects You If You Can’t Work
Why? If you get injured or develop a condition that prevents you from working, this replaces a portion of your income.
- Essential for solo practitioners who rely on their ability to work
- Helps cover personal expenses during recovery
- A smart safety net for long-term career security
7. Health Insurance – Stay Covered Personally
Why? As a business owner, you won’t have employer-provided health insurance. Having your own coverage is crucial for your well-being.
- Covers medical expenses and preventive care
- Available through private plans, ACA marketplaces, or professional associations
- Some states offer small business group plans if you hire employees
8. Business Interruption Insurance – Financial Safety Net in Emergencies
Why? If a natural disaster or unexpected event forces you to shut down temporarily, this covers lost income and ongoing expenses.
- Helps cover rent, payroll, and bills if you can’t operate - especially useful for larger practices
- Useful for clinic-based practices
- Adds stability in case of unexpected disruptions
Final Thoughts
If you’re just starting, Professional Liability and General Liability Insurance are your top priorities. As you grow, adding Workers’ Compensation, Cyber Liability, and Business Property Insurance will ensure long-term security.